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Overeducation and the Gender Pay Gap in Italy. A Double Selectivity Approach

Carolina Castagnetti (), Luisa Rosti () and Marina Toepfer ()
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Luisa Rosti: Department of Economics and Management, University of Pavia
Marina Toepfer: Institute of Economics, University of Hohenheim

No 144, DEM Working Papers Series from University of Pavia, Department of Economics and Management

Abstract: We use a large Italian data set (ISFOL-PLUS 2005-2014) to estimate the gender pay gap (GPG) among overeducated workers. We show that overeducation is an important driver of the GPG. This result holds when controlling for sample selection and endogeneity problems, too. Neglecting selectivity issues may lead to the conclusion that discrimination is the most important driver of the GPG. Yet, when accounting for self-selection and endogeneity bias overeducation is found to merely reflect unobserved differences in personal characteristics such as innate ability. The selection coefficients for both the participation and the overeducation decision allow explaining almost the entire GPG.

Keywords: gender pay gap; double selection; Italy; discrimination; wages. (search for similar items in EconPapers)
JEL-codes: I26 J16 J31 J71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-gen and nep-lma
Date: 2017-10
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