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Selectivity and the gender wage gap decomposition in the presence of a joint decision process

Schafgans, Marcia M. A. and Stelcnery, Morton (2006) Selectivity and the gender wage gap decomposition in the presence of a joint decision process. Econometrics Papers, EM/2006/513. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science, London, UK.

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Abstract

In this paper we revisit the gender decomposition of wages in the presence of selection bias. We show that when labor market participation decisions of couples are not independent, the sample selection corrections used in the literature have been incomplete (incorrect). We derive the appropriate sample selection corrections, based on a reduced form model for the joint participation decisions of both spouses. The influence that husbands’ participation decision has on the female participation decision also highlights the importance of using data on both spouses for the analysis of the gender wage gap. Taking account of these issues might influence the outcome of the decomposition analysis and affect the evidence of discrimination. We analyze its potential impact by analyzing the gender earnings differential using Canadian census data.

Item Type: Monograph (Discussion Paper)
Official URL: http://sticerd.lse.ac.uk
Additional Information: © 2006 The Authors
Library of Congress subject classification: H Social Sciences > HQ The family. Marriage. Woman
H Social Sciences > HN Social history and conditions. Social problems. Social reform
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation
J - Labor and Demographic Economics > J7 - Labor Discrimination > J71 - Discrimination
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C34 - Truncated and Censored Models
Sets: Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: EM/2006/513
Date Deposited: 09 Jul 2008 11:23
URL: http://eprints.lse.ac.uk/6809/

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