On the final day of the EACES 2021 conference, those who survived till the last session had a chance to familiarize themselves with research novelties in the labor market economics. Among very interesting talks on workers' monopsony power, structural breaks and temporary employment contracts in the labor market, we had a chance to present our work on gender wage gaps and efficiency wages.

Our work exploits an empirical interaction of two popular labor market theories: gender discrimination (women earn 10-25% less than identical men) and efficiency wages (around 15% of workers are paid 15-30% above their marginal productivity). We propose a new estimator to measure gender discrimination in wages and apply it to the European data. What we find is that the standard estimates of discrimination (adjusted gender wage gaps) are inflated if markets are segmented into privileged and standard market. A part of a difference in males and females wages is due to the fact that men are more likely to be paid above their marginal productivity and not because women are discriminated. Indeed the data suggests that the access to the privileged market is strongly gendered and women are more likely to earn on the standard market. The fact that the estimates from the pooled model are higher if we do not allow for market segmentation is a good news, as it means that in reality women are discriminated less. Interestingly, in some countries the correction from splitting the labor market into two parts eliminates completely the adjusted gender wage gap and wages of men and women are equal.

This is still work in progress, so the next step is to run our algorithms on the newer data (SES 2014 or SES 2018) and work more on estimator's asymptotic properties (more Monte Carlo simulations or more robustness checks).
We would like to thank all participants of the EACES 2021 labor market session for fruitful discussion and useful comments and suggestions. Hope to present some new research next year!