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Human Capital Accumulation, Equilibrium Wage-Setting and the Life-Cycle Gender Pay Gap

Noriko Amano-Patino, Tatiana Baron and Pengpeng Xiao

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: We study how turnover and human capital dynamics shape the life-cycle gender pay gap when employers are forward-looking and able to set gender-specific wage rates. In our equilibrium wage-posting model with learning-by-doing and fertility events, the life-cycle gap can be attributed to worker productivity, job search, employers’ endogenous wagesetting, and job productivity. Estimating the model on NLSY79 data, we find that although the high school and college gender gaps are driven by different forces, employers’ wagesetting accounts for one-third of the gap in both groups. Neglecting interactions between turnover and human capital dynamics biases down the estimated role of turnover substantially.

Keywords: Gender wage gap; life-cycle; firm heterogeneity; human capital; job search (search for similar items in EconPapers)
JEL-codes: J16 J24 J31 J64 (search for similar items in EconPapers)
Date: 2020-03-02
New Economics Papers: this item is included in nep-gen and nep-hrm
Note: nga25
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