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IZA Discussion Paper No. 7005
November 2012
Selection, Heterogeneity and the Gender Wage Gap

published as 'Unobserved selection heterogeneity and the gender wage gap' in: Journal of Applied Econometrics, 2017, 32 (7), 1348 - 1366

Selection correction methods usually make assumptions about selection itself. In the case of gender wage gap estimation, those assumptions are specially tenuous because of high female non-participation and because selection could be different in different parts of the labor market. This paper proposes an estimator for the wage gap that allows for arbitrary heterogeneity in selection. It applies to the subpopulation of "always employed" women, which is similar to men in labor force attachment. Using CPS data from 1976 to 2005, I show that the gap has narrowed substantially from a -.521 to a -.263 log wage points differential for this population.

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Mark Fallak
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+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
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Christina Gathmann
christina.gathmann@liser.lu

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