Discrimination and efficiency wages

Info: 

 

Praca z kolektorami zbiorów BAEL lub danych spisowych wskazała, jak nieliczne są źródła dla wielu krajów transformujących się. Postanowiliśmy więc rozpocząć nowy program badawczy, aby zebrać dane dla większej liczby krajów. Jednocześnie, uczestnicząc w innym przedsięwzięciu badawczym dotyczącym płac efektywnościowych, zdaliśmy sobie sprawę, że oszacowania skali problemu dyskryminacji w wielu analizach empirycznych mogą być wypaczone. Bierze się to z prostej obserwacji: jeśli w rzeczywistości stosuje się płace efektywnościowe, ale tylko w wybranych gałęziach, w których ilościowo w zatrudnieniu dominują mężczyźni, większość metod badawczych wykaże dyskryminację, nawet wówczas, gdy płace kobiet są dokładnie równe ich produktywności. Dlatego staramy się opracować metodę, która może uodpornić szacunki na to zjawisko. Poza tym, dyskryminacja może nieść za sobą istotne konsekwencje zarówno dla ubóstwa jak i dla decyzji o zakładaniu rodziny. W tym projekcie połączyliśmy wszystkie te tematy w jednym programie badań.


Working with mass collections of LFS or census data (like IPUMS, LSMS, or ISSP) we figured these sources are quite scarce with many important countries missing entirely. Thus, we set up a new research agenda to collect more data. At the same time, engaged in different project on efficiency wages, we realized many of the empirical analyses of the discrimination problem are likely to be biased. This is because if efficiency wages are indeed used in industries were women are scarce, any empirical strategy employed so far in the literature will find discrimination even if womens’ wages equal exactly their productivity. We tried to work on a method that could immunize the estimations to that problem. Finally, there can be important consequences of discrimination on both poverty and child-bearing. This project combines all these topics in one agenda. 

Budget: 

Źródło finansowania | Financing : Narodowe Centrum Nauki, SONATA BIS

Projekt realizowany | Timeline : 03/2013 – 03/2016

Budżet łączny | Total budget: 397 528 zł

  • wynagrodzenia dla podstawowych wykonawców | compensation to researchers: 110 400 zł

  • wynagrodzenia dla asystentów badawczych | compensation to research assistants: 102 000 zł

  • komputery i oprogramowanie (m.in. licencje STATA) | hardware and software (including STATA): 41 200 zł

  • konferencje i inne wyjazdy | conference travels: 18 000 zł

  • materiały + zakup danych + promocja | usables + purchasing data + visibility: 14 040 zł + 18 000 zł + 10 800

  • koszty pośrednie dla Wydziału Nauk Ekonomicznych | overheads for the Faculty of Economics: 29 700 zł

  • koszy pośrednie dla Uniwersytetu Warszawskiego | overheads for the University of Warsaw: 29 700 zł

Purpose: 

The objective of this project is to provide theoretical foundations and propose adequate estimators for the extent of discrimination in labour market access and wages, which would control for the eventual presence of efficiency wages. Efficiency wage hypothesis (e.g. Shapiro & Stiglitz) has been usually considered separately from the discrimination theory (e.g. Becker).

Discrimination is usually measured by the part of the wage differential that cannot be attributed to the differences in endowments between workers. However, if efficiency wage hypothesis is at play, some workers may receive wages exactly equal to their productivity and nonetheless lower than otherwise identical workers, who benefit from the efficiency wages. If this was the case, estimators for the extent of discrimination would be biased and inconsistent.

In the second stage, we will explore the natural experiment of economic transition to try to attribute considerable cross-country differentiation of discrimination to the institutional design and its changes. Over transition e.g. female labour market participation has been characterised by segmentation and frequently has also weakened. These two factors yielded grounds for greater gender discrimination than under planning. Notwithstanding, transition countries differ in institutional design, structural labour supply patterns, labour demand characteristics and the speed of transition processes. We propose to evaluate the contribution of these effects to the observed extent of gender discrimination. Using estimators of gender discrimination obtained from a panel of micro-datasets from possibly large set of transition countries, we seek determinants cross-country variation in female access to the labour and in wages.


Celem projektu jest pomiar zjawiska dyskryminacji ze względu na wiek i płeć na rynku pracy z uwzględnieniem potencjalnej roli płac efektywnościowych. Obecnie stosowane estymatory dyskryminacji są obciążone ze względu na występowanie płac efektywnościowych, a dwie klasy estymatorów nieparametrycznych mogą stanowić dla nich rozsądną alternatywę. Dotąd hipotezę płacy efektywnościowej oraz teorię dyskryminacji traktowano w literaturze przedmiotu rozłącznie, co stanowi zasadniczą lukę zarówno od strony teoretycznej jak i empirycznej.

Teoria ekonomii podpowiada dwie te dwie hipotezy jako podstawowe przyczyny, dla których wynagrodzenia mogą się systematycznie różnić pomiędzy pracownikami w sposób odbiegający od ich produktywności. Hipoteza dyskryminacji (oparta m.in. o tzw. teorię preferencji Beckera, 1962) sugeruje, że z kierując się (nie)chęcią do pewnych grup demograficznych, społecznych, etnicznych lub religijnych pracodawcy będą manipulować stawkami wynagrodzeń, obniżając płace oferowane tym grupom. Z drugiej strony, hipoteza płac efektywnościowych (m.in. Shapiro, Stiglitz, 1986) daje podstawy by uważać, że (niektórzy) pracodawcy skłonni są oferować wynagrodzenia przekraczające poziom indywidualnej produktywności, by zniechęcić pracowników do „bumelowania” (ang. shirking).

Centralną hipotezą roboczą projektu jest stwierdzenie: jeżeli – ze względu na warunki zewnętrzne i heterogeniczność rynków pracy, pracowników i pracodawców – płace efektywnościowe stosowane byłyby tylko w wybranych np. typach przedsiębiorstw lub wobec grup pracowników, przypisywanie „niewyjaśnialnej” części zróżnicowania płac dyskryminacji płacowej prowadziłoby do przeszacowania lub niedoszacowania skali tego zjawiska. Obciążenie estymatorów dyskryminacji oznacza potencjalnie diagnozowanie przejawów dyskryminacji tam, gdzie ich nie ma lub brak podstaw empirycznych do jej potwierdzenia, choć rzeczywiście występuje.

Czynniki instytucjonalne w znacznym stopniu tłumaczą zróżnicowanie skali dyskryminacji zarówno w dostępie do zatrudnienia jak i względem płac. Badaniami objęte zostaną kraje transformujące się ze szczególnym uwzględnieniem Polski i krajów regionu Europy Środkowo-Wschodniej. Podczas transformacji aktywność zawodowa kobiet, osób starszych i młodzieży skupiała się często w wybranych segmentach rynku pracy, a większości krajów uległa obniżeniu. Te dwa czynniki dały podstawę do większej dys-kryminacji płacowej niż w okresie gospodarki centralnie planowanej. Zbadanie instytucjonalnych uwarunkowań dyskryminacji płacowej w dostępie do pracy i dochodu pozwoli zidentyfikować najważniejsze obszary interwencji polityki gospodarczej przeciwdziałającej praktykom dyskryminacyjnym. Tym samym, w ramach projektu powinny zostać osiągnięte dwa główne cele: (a) dostarczenie wiarygodnych i porównywalnych oszacowań dyskryminacji płacowej w krajach transformacji, (b) ocena wpływu struktury instytucjonalnej na powstanie i wzmaganie się tych procesów.


Method | Metodyka

In English: Non-parametric techniques will be used to establish a set of reliable estimates for the extent of labour market discrimination in access to employment and earned income. Next, we will proceed to the analysis of the inequality determinants, with special focus on the institutional context. Addressing the institutional determinants of gender discrimination in accessing employment and labour income will serve the purpose of identifying country-specific relevant areas for targeted policy response.

We will use data for 24 transition and 17 developed countries (as comparison group) using data from labour force surveys, household budget surveys, living standard measurement surveys and current population surveys.

Po polsku: Badanie ma przede wszystkim charakter empiryczny, jednak oparte zostało o silne podstawy teoretyczne. Pierwszym etapem prac będzie meta-analiza badań empirycznych w tym zakresie dostępnych w literaturze ekonomicznej i ekonometrycznej. Następnie opracujemy teoretyczny model włączający hipotezę płac efektywnościowych w proces dyskryminacji – opracowanie zestawu testowalnych empirycznie predykcji „wykrywających” płace efektywnościowe.

W kolejnym kroku oszacujemy skalę dyskryminacji po uwzględnieniu występowania płac efektywnościowych w Polsce – opracowanie wiarygodnej procedury estymacyjnej uwzględniającej występowanie płac efektywnościowych w procesie szacowania dyskryminacji. Przypadek danych polskich jest ważny merytorycznie (takich badań brak) a także wyjątkowo korzystny, ponieważ badanie aktywności ekonomicznej ludności w Polsce (BAEL) jest ankietą quasi-panelową. W trzecim etapie oszacujemy skalę dyskryminacji dla krajów transformujących się – po przetestowaniu metod estymacyjnych rozszerzenie na inne kraje transformujące się. Wreszcie, oszacujemy (i wykażemy przyczynowość) pomiędzy uwarunkowaniami instytucjonalnymi a skalą dyskryminacji na rynku pracy.


Intended contribution | Planowane efekty

In English: Upon completion of the project, we will produce a deliverable report which will contain all our results. In addition we plan to produce four publishable research papers (we intend do submitted to international peer-reviewed journals).This includes: (i) theoretical framework providing grounds for deriving policy implications from the empirical analysis; (ii) empirical method to estimate the scale of labour market discrimination and (iii) assess the relevance of institutional design for establishing and reinforcing the discriminatory schemes in transition countries.

The project will thus contribute in three major ways:

    • propose a consistent and unbiased estimator of discrimination in the presence of efficiency wages
    • provide reliable and comparable estimates of discrimination across transition countries; and
    • establish causal links between institutional design in establishing or reinforcing discrimination.

There are three main contributions distinguishing this study from previous cross-country analyses. First, we will account in our discrimination estimates for the bias induced by eventual use of efficiency wages. To this end we will propose a new estimation routine. Second, we will do so using non-parametric techniques, which are particularly well suited for analysing the countries with a large informal sector. This approach will allow to go beyond the size of the gap at “average” earnings or median of income distribution, as would be necessary in the case of parametric approach. Finally, we will explicitly address the institutional context using coherently estimated measures of gender discrimination, including the distributional effects in the wage gap. Basing on the economic and econometric literature one may state that the choice of estimation technique is not obvious. The proposed non-parametric estimators have clear and direct advantages, but among the non-parametric approaches, the choice between regression-type analyses and matching remains yet to be evaluated in the literature.


Po polsku: Proponowane badanie jest nowatorskie z dwóch perspektyw. Po pierwsze, stanowi wkład w rozwój ekonomii rynku pracy. Uwzględnienie skutków występowania płacy efektywnościowej w badaniu skali dyskryminacji na rynku pracy nie tylko daje początek nowej klasie modeli teoretycznych, ale także pozwala rzucić nowe światło na ilościowy aspekt analiz ekonometrycznych w tej dziedzinie. Po drugie, wyniki naszych analiz wniosą nowy, całościowy ogląd w procesy dyskryminacyjne na rynkach pracy, eksplorując proces transformacji w roli quasi-egzogenicznego źródła zróżnicowania tempa zmian instytucjonalnych.

Taka wielowymiarowa, ilościowa i jakościowa, analiza ekonomicznych, społecznych i demograficznych skali i uwarunkowań dyskryminacji nie była – według naszej wiedzy – dotychczas przedstawiana w badaniach światowych. Analiza skali występowania płacy efektywnościowej pozwoli w sposób empiryczny przygotować się do oceny roli tego zjawiska w procesach dyskryminacyjnych. Analiza skali dyskryminacji płacowej nakierowana jest na stworzenie modelu teoretycznego oraz wiarygodnej techniki estymacji pozwalającej oszacować skalę dyskryminacji płacowej w sposób uwzględniający ewentualne występowanie zjawiska płacy efektywnościowej. Analiza roli determinant instytucjonalnych pozwoli na powiązanie obserwowanych makro i mezzo-wzorców z indywidualnymi charakterystykami uczestników rynku pracy.

  • This data contains the estimates of gender employment gaps for 1600 countries, spanning from Kazakhstan to Spain and covering 30 years of history. The estimates of gender employment gap are adjusted for individual characteristics. We use this data to ask if the existing instruments are sufficient to further reduce the gender inequality in employment.

  • Gender wage gaps are typically measured by the means of decomposition. Proliferation of methods makes the choice of the correct estimator for a given data a conceptual challenge, especially if data availability necessitates simplifications. The challenge lies in accounting for observable differences adequately, which in itself is not only a data issue, but also a conceptual issue. Ideally, one would want to compare men and women actually “alike” in terms of all relevant characteristics, including hours effectively worked, commitment, talent.

Rynek pracy

  • Proste i wygodne narzędzie, które pozwala w wiarygodny sposób sprawdzić, na ile równe są płace w naszej jednostce. 

Gender Gaps Conference was a joint effort of GRAPE and IBS. We believe that the conference was successful in many regards, from attracting talented researchers to delivering nice sessions. Of course, you do not have to take our word for it (especially given the probable bias :) ), just read below.

Gender Gaps Conference was characterized not only by the quality of the presentations, but also by their variety, both in terms of the topics of discussion and in their approach, which comes to demonstrate how broad the literature on Gender Gaps can be. The keynotes, Jill Rubery and Nuria Rodriguez-Planas, are good examples of this variety, as it was demonstrated in the speeches they delivered.

  • Jill opened the conference with a magnificent discussion of the evolution of the Gender wage gap in the United Kingdom in the last 40 years. Her speech, which set the tone of the entire conference, focused not only on the economic determinants of the gender wage gap, namely female underinvestment in human capital; but also on other sources of inequality at the institutional (laws) and organizational level (within firms). During her presentation, she introduced numerous examples of "moving goal posts", that is while women experienced some progress in certain aspects, such as their larger investments in education, new sources of inequality arise. As a result, progress in one area is often counterbalanced by regression in others. These developments, she argued, reflect the "unending capacity of gender inequality to reproduce itself", which calls for constant action of improving the situation and preventing a deterioration of the situation.
  • The conference was concluded by a wonderful keynote address by Nuria, who exploited another type of gender gap, not so closely related to the labour market: the gap in smoking. By all standards, men are more likely to smoke than women, however the author argues that the gap is closing fast: the proportion of smoking women is expected to double over the next decade, while no significant changes for men are forecast. Understanding the reasons behind this development could help in designing policies to curb this trend and prevent its negative effects. Using a sample of second generation (teenage) migrants residing in Spain, she showed that cultural background mattered. Girls whose parents migrated from more gender equal countries (Sweden) were more likely to smoke, ceteris paribus. This finding has clear political implications. Campaigns looking to prevent the rise in smoking behavior should be tailored to each gender.

Variety was not feature only of the keynote speakers. The conference also attracted a wide range of participants, from accomplished researchers such as Olivier Bargain (from Aix Marseille University) to young PhD students. The quality of the presentations by PhD's made selecting a paper for the Best PhD paper prize  a particularly challenging task for the Scientific Committee. To check the winners and a summary of their research follow this link. Sadly, an exhaustive list of all the contributions is beyond the scope of this report. But, you can always see for youself.

Perhaps the most salient feature of the conference was the level of the discussions that ensued most presentations. This was not only related to the presence of discussants (who more than fulfilled their role), but prominently to the interventions of other presenters and the keynote speakers, who provided valuable comments on almost every article. This level of engagement raised the level of the conference and make it more enjoyable and useful for participants. And for this, we, as organizers, can only be thankful to all those that took part in the Gender Gaps Conference.

During the closing ceremony of the Gender Gaps Conference, the prize for the best PhD paper was given. Or should we say were given... The quality of the presentations was such that the Scientific Committee had serious difficulties determining a sole researcher to give the prize to. Instead, the 1000 Euros were distributed equally among three recipients (in alphabetical order).

BizopoulouAspasia Bizopoulou is a young scholar with Greek descendence. Sh completed her BSc in Economics & Philosophy at the University of Warwick in 2012. Afterwards, she moved to Utrecht, where she completed her M.A. in Economics. Since October 2014, Aspasia is pursuing PhD studies at the University of Edinburgh. Her research is primarily on the topic of Labour, Gender and Education Economics. During the Gender Gaps Conference, Aspasia presented her research showing that men and women tend to specialize into different tasks within narrowly defined occupations. More importantly, women seem to perform less of the tasks that are being more valued in the market, i.e. those related to numeracy.

Recent literature for the US, Germany and Australia shows that a significant proportion of the unexplained gender wage-gap can be found within very narrowly defined occupations. I find that this pattern also holds true in European countries. This finding raises the question of why men and women working in very similar jobs are paid substantially different wages. Using a newly available dataset with detailed job-task and occupational information, I investigate whether task segregation by gender within a narrowly defined occupation can account for within-occupational gender wage-gaps. I find that higher levels of task segregation by gender increase the wage-gap within an occupation, in favour of men. I also find that, within occupations, the effect of task segregation on wages is driven by certain tasks that carry a significant wage premium and which are consistently performed by men much more than by women.

[Presentation] | [Full paper]

 

GeraldesDiogo Geraldes research lies at the intersection between economics and psychology, and uses tools of economic experiments and game theory. In his Ph.D. dissertation,Diogo has been investigating men’s and women’s attitude towards competition, and its implications for the labor markets and the educational programs in which women are under-represented. During the Gender Gaps Conference, Diogo discussed the results of a lab experiment showing that women are not less competitive than men, as commonly argued to justify the shortage of women in leading positions. Instead, he presented evidence that women simply dislike competing against men.

A prominent finding in the literature on gender competition is that women are less inclined to compete in comparison to men. In this paper, we conduct a laboratory experiment to examine the importance of the belief in the sex of potential competitors on men’s and women’s decision to enter into competition. Specifically, we test whether women have a weaker preference to compete per se, or rather just shy away from competing against men. The results support the latter hypothesis. When given the possibility to choose a competitor’s sex, or when being in the lab surrounded only by female participants, the percentage of women entering into competition is high and similar to the figures commonly reported for men. Moreover, only women are sensitive to the different cues we provide concerning the sex of potential competitors, and their competitiveness is largely driven by their beliefs in other women’s competitive attitude. Our findings have important policy implications for the labor markets and educational programs in which women are under-represented. They suggest that persuasive references to recent female applicants and/or hiring of female staff while advertising a position could be more effective to promote women’s participation than on-going interventions highlighting women’s under-representation.

[Presentation] | [Full paper]

 

SiebiertAndrea Siebert  studied economics and German literature at the Ruhr-Universität Bochum from 2007 to 2013 and spent a semester abroad at the Université de Rennes, France. Since 2014, she works as research assistant and is a doctoral student at the Westfälische-Wilhelms Universität Münster. Her research interests include labor market economics, the gender wage gap, and wealth inequality. During the Gender Gaps Conference, Andrea presented a paper where she studies the motherhood wage penalty and the role of motherhood timing for labor market outcomes. She finds that the motherhood penalty is due to mothers having a lower wage growth than they could have had if they remained childless. Moreover, a delay in the time of birth is associated with higher wages. She also explores for heterogeneous effects, just to discover that the effects are stronger in the case of migrants.

Although we have observed an increase in gender equality on the labour market, like rising participation rates of women, and a narrowing of the gender wage gap, there is substantial evidence of a wage penalty for women once they have children. In order to shed light on the effect of motherhood timing on career outcomes, this paper investigates whether postponing the first birth mitigates the negative effect of having children on wages. Using data from the German Socio-Economic Panel (GSOEP) for the years 1991- 2013, I estimate a fixed-effects model that allows to reveal the underlying mechanisms of the motherhood wage penalty. To control for factors that simultaneously influence childbirth and wages, I include measures for changes in wage growth before childbirth. Since the age at first birth is time-invariant, I allow the motherhood wage gap to vary by age at first birth. Additionally, I test for self-selection into the labour market. The results indicate that a postponement of the first birth narrows the motherhood wage gap and thus, has a positive influence on female wages. Nevertheless, the results indicate that high-productive women who give birth later in life self-select out of the labour force.

[Presentation] | [Full paper]

We wish them plenty of success in their research and hope to meet them in future editions of the Gender Gaps Conference.

Opublikowane | Published

  • A cautionary note on the reliability of the online survey data – the case of Wage Indicator | Sociological Methods and Research

    We investigate the reliability of data from the Wage Indicator (WI), the largest online survey on earnings and working conditions. Comparing WI to nationally representative data sources for 17 countries reveals that participants of WI are not likely to have been representatively drawn from the respective populations. Previous literature has proposed to utilize weights based on inverse propensity scores, but this procedure was shown to leave reweighted WI samples different from the benchmark nationally representative data. We propose a novel procedure, building on covariate balancing propensity score, which achieves complete reweighting of the WI data, making it able to replicate the structure of nationally representative samples on observable characteristics. While rebalancing assures the match between WI and representative benchmark data sources, we show that the wage schedules remain different for a large group of countries. Using the example of a Mincerian wage regression, we find that in more than a third of the cases, our proposed novel reweighting assures that estimates obtained on WI data are not biased relative to nationally representative data. However, in the remaining 60% of the analyzed 95 datasets systematic differences in the estimated coefficients of the Mincerian wage regression between WI and nationally representative data persists even after reweighting. We provide some intuition about the reasons behind these biases. Notably, objective factors such as access to the Internet or richness appear to matter, but self-selection (on unobservable characteristics) among WI participants appears to constitute an important source of bias.

    We provide weights and full documentation here.

    Joanna
    Tyrowicz
    Lucas
    van der Velde
    Magdalena
    Smyk-Szymańska
  • How (Not) To Make Women Work? Evidence from Transition Countries | Social Science Research

     
    Women in developed economies have experienced an unparalleled increase in employment rates, to the point that the gap with respect to men was cut in half. This positive trend has often been attributed to changes in the opportunity costs of working (e.g. access to caring facilities) and not-working (e.g. educational attainment). Meanwhile, the gender employment gaps were stagnant in transition economies. Admittedly, employment equality among genders was initially much higher in transition countries. We exploit this unique evidence from transition and advanced countries, to analyze the distributional nonlinearities in the relationship between the institutional environment and the (adjusted) gender employment gaps. We estimate comparable gender employment gaps on nearly 1600 micro databases from over 40 countries. We relate these estimates to changes in the opportunity costs of working and not-working. Changes in opportunity costs exhibited stronger correlation with gender employment equality where the gap was larger, i.e. advanced economies. We provide some evidence that these results are not explained away by transition-based theories, and argue that the observed patterns reflect a level effect. Currently, advanced and transition economies are at par in terms of gender employment equality. Hence, the existing instruments might not be sufficient to further reduce the gender employment gap.

    The data for replication is distributed here.

    Joanna
    Tyrowicz
    Karolina
    Goraus
    Lucas
    van der Velde
  • Identifying age penalty in women's wages: new method and evidence from Germany 1984-2014 | Feminist Economics

    Given theoretical premises, gender wage gap adjusted for individual characteristics is likely to vary over age. We extend DiNardo, Fortin and Lemieux (1996) semi-parametric technique to disentangle year, cohort and age effects in adjusted gender wage gaps. We rely on a long panel of data from the German Socio-Economic Panel covering the 1984-2015 period. Our results indicate that the gender wage gap increases over the lifetime, for some birth cohorts also in the post-reproductive age.

     

    Joanna
    Tyrowicz
    Lucas
    van der Velde
  • Zmienne pominięte a luka płacowa kobiet – wnioski z analizy uwzględniającej wydajność | Gospodarka Narodowa

    Celem artykułu jest zmierzenie skali obciążenia oszacowań luki płacowej kobiet, w warunkach gdy wydajność nie jest obserwowalna. Korzystamy z unikatowych danych jednostkowych o wydajności i wynagrodzeniach dla 2 292 pracowników polskiej firmy zajmującej się handlem detalicznym w branży odzieżowej. Korzystamy z parametrycznych metod dekompozycji do oszacowania skorygowanej luki płacowej z uwzględnieniem i bez uwzględnienia miar wydajności. Wyniki wskazują, że obciążenie wynikające z pominięcia miar wydajności jest istotne statystycznie i wysokie w sensie ekonomicznym, w niektórych specyfikacjach zasadniczo zmieniając wnioskowanie o występowaniu nieuzasadnionej różnicy w wynagrodzeniach pomiędzy kobietami i mężczyznami. Większość oszacowań tzw. skorygowanej luki płacowej nie uwzględnia miar produktywności, głównie z uwagi na brak stosownych miar w dostępnych zbiorach. Choć nasze wyniki dotyczą tylko dla jednego przedsiębiorstwa, dają przesłanki by stwierdzić, że oszacowania, którymi posługuje się literatura, cechować może znaczne obciążenie.

    Joanna
    Tyrowicz
  • Which gender wage gap estimates to trust? A comparative analysis using data from Poland | Review of Income and Wealth

    The aim of this paper is to compare estimates of the adjusted wage gap from different methods and sets of conditioning variables. We apply available parametric and non‐parametric methods to LFS data from Poland for 2012. While the raw gap amounts to nearly 10 percent of the female wage; the adjusted wage gap estimates range between 15 percent and as much as 23 percent depending on the method and the choice of conditional variables. The differences across conditioning variables within the same method do not exceed 3pp, but including more variables almost universally results in larger estimates of the adjusted wage gaps. Methods that account for common support and selection into employment yielded higher estimates of the adjusted wage gap. While the actual point estimates of adjusted wage gap are slightly different, all of them are roughly twice as high as the raw gap, which corroborates the policy relevance of this methodological study.

    Joanna
    Tyrowicz
    Karolina
    Goraus
    Lucas
    van der Velde
  • Luki płacowe w kraju pochodzenia i w kraju docelowym na przykładzie kobiet imigrujących na amerykański rynek pracy | Bank i Kredyt

    Jedną z istotnych przesłanek decyzji migracyjnej są różnice w płacach na domowym i docelowym rynku pracy. Różnice te wynikać mogą jednak nie tylko z względnej różnicy w produktywności czy ew. zapotrzebowania na kapitał ludzki. Istotną przyczyną może być także nierówność płac, np. ze względu na płeć. Tymczasem ekonomia behawioralna i psychologiczna dają silne przesłanki, by oczekiwać, ze grupa dyskryminowana w krajach o większej skali nierówności płacowych może akceptować wyższe luki płacowe także na docelowym rynku pracy. Wykorzystując oszacowania nierówności płacowych ze względu na płeć w krajach pochodzenia imigrantek w Stanach Zjednoczonych oraz oszacowania luk płacowych na amerykańskim rynku pracy poddajemy empirycznej weryfikacji tezę, że wysokość luki płacowej imigrantek zależy od (skorygowanych) luk płacowych doświadczanych przez kobiety w kraju pochodzenia. Otrzymane wyniki wskazują na brak korelacji pomiędzy lukami płacowymi na rynku pracy w Stanach Zjednoczonych i w kraju pochodzenia.

    Joanna
    Tyrowicz
    Lucas
    van der Velde
  • Próba empirycznej weryfikacji hipotezy płac efektywnościowych w Polsce | Ekonomista

    The efficiency wage hypothesis suggests that wages are higher than labor productivity in labor markets where workers may shirk. The paper presents an attempt to verify empirically prevalence of efficiency wages in Poland. We utilize Labor Force Survey data for the years 1995-2010. Our identification strategy relies on differences in residuals from the Mincer wage regression between movers (i.e. people changing jobs) and stayers (i.e. persons who did not change employment in the observational window). The results provide tentative confirmation to the prevalence of efficiency wages in Poland.

    Joanna
    Tyrowicz
  • Language and (the Estimates of) the Gender Wage Gap | Economics Letters

    In this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country. We find that nations with more gender neutral languages tend to be characterized by lower estimates of GWG. The results are robust to a number of sensitivity checks.


    In this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country. We find that nations with more gender neutral languages tend to be characterized by lower estimates of GWG. The results are robust to a number of sensitivity checks.

    Our source of estimates for the adjusted gender wage gap is an updated version of the dataset developed by Doris Wichselbaumer and Rudolf Winter-Ebmer for a paper published in Journal of Economic Surveys in 2005 and a paper published in Kyklos in 2008. The original data covers articles published until 2005, whereas we include studies published between 2005 and 2014. In total we added 1197 estimates of the adjusted GWG from 117 new studies for 56 countries.

    To ensure continuity, we adopted the same conventions with respect to the language of publication (English) and the search engine (EconLit). We also used the same keywords: “(wage* or salar* or earning*) and (discrimination or differen*) and (sex or gender)”. To test if this search was not excessively narrow, we erased one keyword at a time from the first parenthesis, subsequently erasing the logical connectors (“or” “and”). We included published final or the most recent available versions of articles (chapters and books excluded). The complete list is available upon request.} Similarly to WWE, we excluded incomparable estimates of the adjusted GWG (e.g. non-parametric estimates along the wage distribution).

    All the data needed to replicate our analysis is available below. The zip file contains:

    • A csv file with the information on the articles added.
    • Data on language gender intensity come from World Atlas of Language Structures
    • Complete data set (combining meta-data and country characteristics)
    • Do files
    Joanna
    Siwińska-Gorzelak
    Joanna
    Tyrowicz
    Lucas
    van der Velde
  • Gender Wage Gap in Poland – Can It Be Explained by Differences in Observable Characteristics? | Ekonomia

    The raw gender wage gap over the period 1995-2012 amounts to app. 9% of hourly wage and is fairly stable. However, the raw gap does not account for differences in endowments between genders. In fact, the adjusted wage gap amounts to as much as 20% on average over the analysed period and shows some cyclical properties. The estimates of adjusted gender wage gap do not seem to exhibit any long-term trends, which suggest that in general neither demographic changes nor the progressing transition underlie the phenomenon of unequal pay for the same work among men and women.

    Joanna
    Tyrowicz
    Karolina
    Goraus

W toku | Work in progress

  • When the opportunity knocks: large structural shocks and gender wage gaps

    Undergoing a large structural shock, labor markets may become less inclusive. We test for this thesis analyzing the behavior of adjusted gender wage gaps in a wide selection of transition countries. We estimate comparable measures of adjusted gender wage gaps for a comprehensive selection of transition countries over a period spanning nearly three decades. We combine these estimates with measures of labor market reallocation in transition economies to uncover the relation between worker flows and the gender wage gap. Results indicate that in periods of reallocation, the adjusted wage gaps increase. Distinguishing between flows according to their contribution to structural transformation reveals the distinctive role paid by separations from the state-owned manufacturing sector, usually leading to greater adjusted gaps. The emerging new sectors in the economy tend to be more inclusive in the short run, associated with a lower adjusted gender gap. In the medium run, the adverse effect of greater separations from the old sector is even more pronounced, while the emergence of the new sector is less relevant.

    Joanna
    Tyrowicz
    Lucas
    van der Velde
  • Estimating gender wage gap in the presence of efficiency wages - evidence from European data

    Gender wage gap (adjusted for individual characteristics) as a phenomenon means that women are paid unjustifiably less than men, i.e. below their productivity. Meanwhile, efficiency wages as a phenomenon mean that a group of workers is paid in excess of productivity. However, productivity is typically unobservable, hence it is proxied by some observable characteristics. If efficiency wages are effective only in selected occupations and/or industries, and these happen to be dominated by men, measures of adjusted gender wage gaps will confound (possibly) below productivity compensating of women with above productivity efficiency wage prevalence. We propose to utilize endogenous switching models to estimate adjusted gender wage gaps. We find that without correction for the prevalence of efficiency wages, the estimates of the adjusted gender wage gaps tend to be substantially inflated.

    Joanna
    Tyrowicz
    Katarzyna
    Bech
  • How to make a country look equal

    Methods for estimating the the scope of inequality in various outcome measures such as income, education, health or poverty are fairly accurate in detecting differences adjusted for individual characteristics. However, the actual estimated inequality may depend on the interaction between (the weakness of) the method and (the weakness of) the institutional environment. We make a case by comparing the country rankings for the adjusted gender wage gap among 23 EU countries. We show that the effects of these interactions are indeed large by comparing the estimates from various methods obtained from the same database. In fact, depending on the control variables and estimation method, a country may change its position in the ranking by as much as 10 positions -- both towards greater equality and towards greater inequality. We argue that this variability in country ranking position may yield important policy insights into prioritizing intervention. We also infer that given the intimate and unbreakable relationship between institutional deficiencies and features of the adjustment methods, ranking per se may be misguiding the public debate and thus should be abandoned or substantially refined.


    Gender wage gaps are typically measured by the means of decomposition. Proliferation of methods makes the choice of the correct estimator for a given data a conceptual challenge, especially if data availability necessitates simplifications. The challenge lies in accounting for observable differences adequately, which in itself is not only a data issue, but also a conceptual issue. Ideally, one would want to compare men and women actually “alike” in terms of all relevant characteristics, including hours effectively worked, commitment, talent. However, many of these characteristics are not observable (or are imperfectly measured, e.g. human capital).

    Decompositions are prone to multiple risks. For example, the urge to compare only the comparable implies that a decision needs to be made about the use of observations which clearly are not comparable. Nopo (2008) proposes to use these observations to infer about the possible selectivity in this process, but alternative approaches consist of reweighing or neglecting this issue. Similar choices concern the treatment of distributional issues. Finally, for the parametric methods, the dependence on the functional form may influence the results as well. Consequently, depending on the features of a given labor market, an estimate of gender wage gap obtained with a given method is likely to overstate or understate the extent of true unjustified inequality in wages.

    We make available a dataset which provides a full selection of gender wage gap estimates for the EU countries, using data from EU-SILC. Across countries and years, everybody can see for themselves, what is the source of the gender wage inequality in a given European country. We provide:

    • A dta file with the full set of estimates for the gender wage gaps and a generating dofile
    • Data documentation
    Joanna
    Tyrowicz
    Karolina
    Goraus
    Lucas
    van der Velde

Estimator

Gender wage gap (adjusted for individual characteristics) as a phenomenon means that women are paid unjustifiably less than men, i.e. below their productivity. Meanwhile, efficiency wages as a phenomenon mean that a group of workers is paid in excess of productivity. However, productivity is typically unobservable, hence it is proxied by some observable characteristics. If efficiency wages are effective only in selected occupations and/or industries, and these happen to be dominated by men, measures of adjusted gender wage gaps will confound (possibly) below productivity compensating of women with above productivity efficiency wage prevalence. We propose to utilize endogenous switching models to estimate adjusted gender wage gaps. We find that without correction for the prevalence of efficiency wages, the estimates of the adjusted gender wage gaps tend to be substantially inflated.

It appears plausible that efficiency wages may be more relevant for men — whereas women may value more some other attributes of work both as incentive to avoid shirking. This would imply that a part of wage differential typically unexplained by observable characteristics could actually reflect wages of men in excess of marginal productivity (efficiency wages) and not discriminatory pricing of women’s work.

While this hypothesis is by no means new, it is challenging to address empirically. Typically, efficiency wages are not identified directly. In standard wage datasets, such as linked employer-employee data or labor force survey, prevalence of efficiency wages may be confirmed or rejected, but usually not attributed to respective workers. Indeed, individual productivity is rarely observed, thus making it impossible to judge if wage exceeds it. Moreover, clearly, if there is sorting, even identifying productivities is not going to help much due to endogeneity. A class of full information maximum likelihood estimators with endogenous switching provides consistent estimators of returns to individual characteristics, accounting simultaneously for selection and wage determination, but these models require that the data comprises assignment between the markets, e.g. unionized vs non-unionized workers, public vs. private sector, etc.

We propose an estimator of gender wage gap, which accounts for bias stemming from a separation between a privileged and standard labor markets, when this separation is endogenous and a priori unknown (unobservable). We analyze estimates of the gender wage gaps in European countries using linked employer-employee data for the European countries (EU SES). Thus, we address an important concern implicit in the previous literature that the estimates of adjusted gender wage gap are inflated by the incidence of efficiency wages.

Derivation

Matlab code

A (3) | B (3) | C (4) | D (1) | E (1) | F (2) | G (2) | H (1) | I (2) | L (3) | M (1) | N (2) | P (3) | R (2) | S (7) | T (2) | U (3) | V (1)

Estimates for Switzerland

Estimates for Taiwan

Estimates for Turkey

Estimates for Ukraine

Estimates for United Kingdom

Estimates for Urugway

Estimates for Venezuela