Wage compression and the gender pay gap

Kahn, Lawrence M.

doi:10.15185/izawol.150

“…There is an international literature that links minimum wage legislation to the narrowing of the gender wage gap. Kahn (2015) finds that since men and women are disproportionately located at different parts of the wage distribution, setting minimum wages contributes to narrowing the gender wage gap at the bottom of the wage distribution by raising female wages disproportionately to those of men. Similarly, Majchrowska and Strawinski (2017) find that the increase in the minimum wage in Poland was associated with the decline in the gender wage gap among younger workers.…”

Section: Collective Bargaining and Minimum Wage Legislationmentioning

confidence: 99%

Distributional changes in the gender wage gap in the post-apartheid South African labour market

Mosomi¹

2019

WIDER Working Paper

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.Abstract: This paper investigates the evolution of the gender wage gap in South Africa, using the 1993-2015 Post-Apartheid Labour Market Series data set. The changes in the gap are heterogeneous across the wage distribution. There has been a substantial narrowing of the gap at the bottom of the distribution, attributable to the implementation of the minimum wage in lowpaying industries However, the median gender wage gap is substantial at 23-35 per cent. This is unexplained by differences in human capital characteristics, and is not declining over time. This implies that wage-employed women in South Africa have better human capital characteristics than men. Contrary to previous literature, the wage gap at the mean narrowed from 40 per cent in 1993 to 16 per cent in 2014. The gap at the 90 th percentile declined during 1993-2005, but has expanded in recent years. This is due to a continually expanding unexplained component of the wage gap, which is usually associated with discrimination.

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“…However, there is considerable variation in the extent of inequality across industrialized countries. According to OECD data, female earnings ratios, relative to their male counterparts, were 92 per cent in Denmark, 94 per cent in Norway, 82 per cent in the United Kingdom, 81 per cent in the United States, and 67 per cent in South Korea (Kahn ).…”

Section: Literature and Hypothesesmentioning

confidence: 99%

The gender wage gap and the moderating effect of education in public and private sector employment

Stritch

¹

,

Villadsen

²

2018

Public Administration

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In many countries, the rules and statutes governing public employment promote both transparency and accountability in employee hiring, promotion, and wage setting. These aspects of public employment might mitigate the pay inequalities women face in the public workplace relative to the private sector. At the same time, these formal aspects of public sector employment and payment systems might also limit the ability of women in the public sector to leverage human capital increases as a means of reducing pay inequalities. Utilizing 25 years of employee‐level data from Denmark, we find that women professionals in the Danish public sector face a smaller wage penalty than their private sector counterparts. However, our findings also suggest that public employment may place structural limits on their ability to leverage educational attainment to close the gap even further.

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“…Previous evidence, such as by Gregory (1999) and Kahn (2015), shows that a more compressed wage distribution tends to go hand-inhand with a lower gender pay gap by setting an equal minimum standard for both women and men.…”

Section: Discussionmentioning

confidence: 95%

“…More recently, Kahn (2015) similarly argues that cross-country comparisons of 31 OECD countries indicate that countries with labour market institutions that produce more compressed wage distributions overall also produce lower gender wage gaps. Kahn explicitly mentions minimum wages as one of the mechanisms affecting overall wage compression.…”

Section: Previous Literaturementioning

confidence: 99%

“…Several international studies indeed present simulations or report evidence showing minimum wages reduce the gender wage gap by elevating the 'sticky floor' (Dex et al 2000, Robinson 2005, Hallward-Driemeier et al 2015, Boll et al 2015. More generally, Kahn (2015) argues that labour market institutions that act to increase wage compression also, as a by-product, tend to reduce gender wage gaps. Comparing 31 OECD countries, he shows a strong positive correlation between male wage inequality and the median gender wage gap.…”

Section: Introductionmentioning

confidence: 99%

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Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap

Broadway

¹

,

Wilkins

²

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap DECEMBER 2017Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap * When wage setting is more regulated, the gender wage gap tends to decrease. We examine whether this holds for a complex system of occupation-and industry-specific minimum wages, which cover both low-pay and high-pay segments of the labour market.The system has the potential to close the gender wage gap by ensuring equal minimum pay for equal jobs, but it also has the potential to widen it by discriminating against jobs more commonly held by women. We carefully describe wage levels as well as returns to experience and their association with individual gender as well as the male employment share in the individual's field (industry or occupation) of work. We find that the gender wage gap among employees receiving a minimum wage is less than half the magnitude of the gap among other employees. Despite this, there is nonetheless evidence that, within the minimum-wage system, there is a wage penalty for employment in jobs more commonly held by women, although only for employees without university degrees. Our results suggest that, for university-educated women, the regulated setting of minimum wages helps to close the gender wage gap and counteracts the undervaluation of work typically undertaken by women. However, for less-educated women, who comprise approximately 82% of female minimu...

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Wage compression and the gender pay gap

Cited by 19 publications

References 12 publications

Distributional changes in the gender wage gap in the post-apartheid South African labour market

Distributional changes in the gender wage gap in the post-apartheid South African labour market

The gender wage gap and the moderating effect of education in public and private sector employment

Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap

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