Tomi Kyyrä (Government Institute for Economic Research), Ossi Korkeamäki

Explaining Gender Wage Differentials: Findings from a Random Effects Model

In this paper we evaluate the extent to which the gender wage gap in the Finnish manufacturing sector is attributable to within-job wage di.erentials, sex differences in individual qualifications, and disproportionate concentration of women into lowerpaying firms and lower-paying jobs within firms. We use matched employer-employee data to compare wage di.erentials between similarly qualified female and male workers who are doing the same job for the same employer. Our modelling approach employs a nested random effects specification to account for the hierarchical grouped structure of the underlying data.

Keywords: Gender wage gap, wage discrimination, sex segregation, random coefficient model.

JEL Codes: J16, J31, J71, C21

Session: 2e   Room 2004   Category: Wages 1

Paper