Salimata Sissoko’s research while affiliated with Université Libre de Bruxelles and other places

This paper provides evidences ,on the ,effects of unobserved ,individual heterogeneity on estimated,gender ,pay ,differentials. Using the European ,Community ,Household ,Panel (ECHP), we present a cross-country comparison ofthe evolution of unadjusted and adjusted gender pay gaps using both cross-section and panel data estimation techniques. The analysed countries differ greatly with respect to labour market legislation, bargaining practices structure of earnings ,and ,female ,employment ,rates.. Once adjusting ,for unobserved heterogeneity, we find a narrowed male-female pay differential, as well as significantly different rates of return on individual characteristics. In particularly, the adjusted wage differential decreases by 7% in Belgium, 14%in Ireland, between 20-30% Germany, Italy, the Netherlands and Spain and of 41% and 54% in the UK and in Denmark respectively. Keywords: gender wage gap, panel data, discrimination JEL-Classification: J16, J31, J71

A large number of studies have documented a generalized tendency towards a reduction in the gross gender pay gap in the European countries during the 1970s. The following decades have nevertheless produced a more scattered pattern: while some countries have continued to witness a reduction in the gender wage inequalities, others have shown a stationary trend. The gender gap hence remains at an important level, although significant differences across countries may be observed.

Using a rich and comparable micro-data set, we analyse international differences in gender pay gaps in the private sector for a sample of five European economies: Belgium, Denmark, Ireland, Italy and Spain. Using different methods, we examine how wage structure, differences in the distribution of measured characteristics, occupational segregation contribute to explain the pattern of international differences. Furthermore, we take into account indirect discrimination influencing female occupational distributions. We find significant impacts of those latter factors on gender differentials. However, the magnitude of their effects varies across countries.