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Distribution of the gender wage gap with endogenous human capital: evidence for Spain

Lucía Navarro-Gómez (Departamento de Estadística y Econometría, Universidad de Málaga, Málaga, Spain.)
Mario F. Rueda-Narvaez (Departamento de Estadística y Econometría, Universidad de Málaga, Málaga, Spain.)

Evidence-based HRM

ISSN: 2049-3983

Article publication date: 7 April 2015

351

Abstract

Purpose

The purpose of this paper is to provide empirical evidence on gender wage discrimination and how it is distributed among women in the Spanish labour market, where female participation has been rising for decades. The empirical approach aims to assess to which extent discrimination is evenly distributed or not among women, and how different subgroups of workers are affected by it.

Design/methodology/approach

Using data from the Spanish section of the European Community Household Panel (1994-2001) the authors estimate earnings equations for men and women using the instrumental variable (IV) method proposed by Hausman and Taylor (1981). This aims to avoid biases resulting from endogeneity of regressors. Building on these results, the authors follow the proposal of Jenkins (1994) and estimate a bivariate wage distribution for women, containing individual expected earnings with and without discrimination.

Findings

The results show that discrimination is distributed unevenly across female workers and that the degree to which women are discriminated against grows as they move upward in the wage distribution. Also, when wage determinants are allowed to be endogenous, the results experience drastic changes, both in average and distributional terms.

Research limitations/implications

The results point to a “glass ceiling” operating on female earnings and also show that endogeneity of human capital should be taken into account when analysing discrimination. Therefore, more empirical evidence in this line would be welcome.

Originality/value

By using IV estimation of wages, the authors control for the existence of endogeneity in earnings equations. Also, the authors provide unexplained wage differentials for particular groups of female wage earners, specially according to education, experience and job tenure.

Keywords

Acknowledgements

The authors acknowledge and thank the financial assistance of the Andalusian Government through Project No. P09-SEJ-4859.

Citation

Navarro-Gómez, L. and Rueda-Narvaez, M.F. (2015), "Distribution of the gender wage gap with endogenous human capital: evidence for Spain", Evidence-based HRM, Vol. 3 No. 1, pp. 25-45. https://doi.org/10.1108/EBHRM-05-2013-0012

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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