Distribution of the gender wage gap with endogenous human capital: evidence for Spain
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
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited