IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/28855.html
   My bibliography  Save this paper

The Impact of Selection into the Labor Force on the Gender Wage Gap

Author

Listed:
  • Francine D. Blau
  • Lawrence M. Kahn
  • Nikolai Boboshko
  • Matthew L. Comey

Abstract

We study the impact of selection bias on estimates of the gender pay gap, focusing on whether the gender pay gap has fallen since 1981. Previous research has found divergent results across techniques, identification strategies, data sets, and time periods. Using Michigan Panel Study of Income Dynamics data and a number of different identification strategies, we find robust evidence that, after controlling for selection, there were large declines in the raw and the unexplained gender wage gaps over the 1981-2015 period. Under our preferred method of accounting for selection, we find that the raw median wage gap declined by 0.378 log points, while the median unexplained gap declined by a more modest but still substantial 0.204 log points. These declines are larger than estimates that do not account for selection. Our results suggest that women’s relative wage offers have increased over this period, even after controlling for their measured covariates, including education and actual labor market experience. However, we note that substantial gender wage gaps remain. In 2015, at the median, the selectivity-corrected gaps were 0.242 log points (raw gap) and 0.206 log points (unexplained gap).

Suggested Citation

  • Francine D. Blau & Lawrence M. Kahn & Nikolai Boboshko & Matthew L. Comey, 2021. "The Impact of Selection into the Labor Force on the Gender Wage Gap," NBER Working Papers 28855, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28855
    Note: LS
    as

    Download full text from publisher

    File URL: https://www.nber.org/papers/w28855.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Alesina & Armando Miano & Stefanie Stantcheva, 2023. "Immigration and Redistribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 1-39.
    2. Alesina, Alberto & Murard, Elie & Rapoport, Hillel, 2019. "Immigration and Preferences for Redistribution in Europe," IZA Discussion Papers 12130, Institute of Labor Economics (IZA).
    3. Barrera, Oscar & Guriev, Sergei & Henry, Emeric & Zhuravskaya, Ekaterina, 2020. "Facts, alternative facts, and fact checking in times of post-truth politics," Journal of Public Economics, Elsevier, vol. 182(C).
    4. Francine D. Blau & Andrea H. Beller, 1988. "Trends in Earnings Differentials by Gender, 1971–1981," ILR Review, Cornell University, ILR School, vol. 41(4), pages 513-529, July.
    5. Sims,Christopher A. (ed.), 1994. "Advances in Econometrics," Cambridge Books, Cambridge University Press, number 9780521444606, September.
    6. Richard Blundell & Amanda Gosling & Hidehiko Ichimura & Costas Meghir, 2007. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," Econometrica, Econometric Society, vol. 75(2), pages 323-363, March.
    7. Claudia Olivetti & Barbara Petrongolo, 2008. "Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 621-654, October.
    8. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    9. Mounir Karadja & Johanna Mollerstrom & David Seim, 2017. "Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution," The Review of Economics and Statistics, MIT Press, vol. 99(2), pages 201-212, May.
    10. Charité, Jimmy & Fisman, Raymond & Kuziemko, Ilyana & Zhang, Kewei, 2022. "Reference points and redistributive preferences: Experimental evidence," Journal of Public Economics, Elsevier, vol. 216(C).
    11. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    12. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    13. Hungerman, Daniel M., 2009. "Crowd-out and diversity," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 729-740, June.
    14. Ilyana Kuziemko & Michael I. Norton & Emmanuel Saez & Stefanie Stantcheva, 2015. "How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments," American Economic Review, American Economic Association, vol. 105(4), pages 1478-1508, April.
    15. Blau, Francine D & Kahn, Lawrence M, 1997. "Swimming Upstream: Trends in the Gender Wage Differential in 1980s," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 1-42, January.
    16. Sonja C. Kassenboehmer & Mathias G. Sinning, 2014. "Distributional Changes in the Gender Wage Gap," ILR Review, Cornell University, ILR School, vol. 67(2), pages 335-361, April.
    17. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    18. Fabian Kosse & Thomas Deckers & Pia Pinger & Hannah Schildberg-Hörisch & Armin Falk, 2020. "The Formation of Prosociality: Causal Evidence on the Role of Social Environment," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 434-467.
    19. Alberto Alesina & Stefanie Stantcheva & Edoardo Teso, 2018. "Intergenerational Mobility and Preferences for Redistribution," American Economic Review, American Economic Association, vol. 108(2), pages 521-554, February.
    20. Manuel Arellano & Stéphane Bonhomme, 2017. "Quantile Selection Models With an Application to Understanding Changes in Wage Inequality," Econometrica, Econometric Society, vol. 85, pages 1-28, January.
    21. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
    22. Patrick Bayer & Kerwin Kofi Charles, 2018. "Divergent Paths: A New Perspective on Earnings Differences Between Black and White Men Since 1940," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1459-1501.
    23. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    24. Elena Cettolin & Sigrid Suetens, 2019. "Return on Trust is Lower for Immigrants," The Economic Journal, Royal Economic Society, vol. 129(621), pages 1992-2009.
    25. Armin Falk & Anke Becker & Thomas Dohmen & David Huffman & Uwe Sunde, 2023. "The Preference Survey Module: A Validated Instrument for Measuring Risk, Time, and Social Preferences," Management Science, INFORMS, vol. 69(4), pages 1935-1950, April.
    26. Sims,Christopher A. (ed.), 1994. "Advances in Econometrics," Cambridge Books, Cambridge University Press, number 9780521444590, September.
    27. Chinhui Juhn, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 79-121.
    28. Chamberlain, Gary, 1986. "Asymptotic efficiency in semi-parametric models with censoring," Journal of Econometrics, Elsevier, vol. 32(2), pages 189-218, July.
    29. Haaland, Ingar & Roth, Christopher, 2020. "Labor market concerns and support for immigration," Journal of Public Economics, Elsevier, vol. 191(C).
    30. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
    31. Matz Dahlberg & Karin Edmark & Heléne Lundqvist, 2012. "Ethnic Diversity and Preferences for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 41-76.
    32. Derek Neal, 2004. "The Measured Black-White Wage Gap among Women Is Too Small," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 1-28, February.
    33. Cruces, Guillermo & Perez-Truglia, Ricardo & Tetaz, Martin, 2013. "Biased perceptions of income distribution and preferences for redistribution: Evidence from a survey experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 100-112.
    34. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    35. Guido W. Imbens & Charles F. Manski, 2004. "Confidence Intervals for Partially Identified Parameters," Econometrica, Econometric Society, vol. 72(6), pages 1845-1857, November.
    36. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    37. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    38. Katie Meara & Francesco Pastore & Allan Webster, 2020. "The gender pay gap in the USA: a matching study," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 271-305, January.
    39. Paola Giuliano & Antonio Spilimbergo, 2014. "Growing up in a Recession," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 787-817.
    40. Esfandiar Maasoumi & Le Wang, 2019. "The Gender Gap between Earnings Distributions," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2438-2504.
    41. Christina M. Fong & Erzo F. P. Luttmer, 2009. "What Determines Giving to Hurricane Katrina Victims? Experimental Evidence on Racial Group Loyalty," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 64-87, April.
    42. Fong, Christina M. & Luttmer, Erzo F.P., 2011. "Do fairness and race matter in generosity? Evidence from a nationally representative charity experiment," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 372-394, June.
    43. Austin van Loon & Jeremy Bailenson & Jamil Zaki & Joshua Bostick & Robb Willer, 2018. "Virtual reality perspective-taking increases cognitive empathy for specific others," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-19, August.
    44. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-895, October.
    45. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-318, May.
    46. Barry T. Hirsch, 2005. "Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills," ILR Review, Cornell University, ILR School, vol. 58(4), pages 525-551, July.
    47. Charles F. Manski & John V. Pepper, 2000. "Monotone Instrumental Variables, with an Application to the Returns to Schooling," Econometrica, Econometric Society, vol. 68(4), pages 997-1012, July.
    48. Cecilia Machado, 2017. "Unobserved selection heterogeneity and the gender wage gap," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(7), pages 1348-1366, November.
    49. O'Neill, June & Polachek, Solomon, 1993. "Why the Gender Gap in Wages Narrowed in the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 205-228, January.
    50. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    51. Brigham R. Frandsen & Lars J. Lefgren, 2018. "Testing Rank Similarity," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 86-91, March.
    52. Sergio P. Firpo & Nicole M. Fortin & Thomas Lemieux, 2018. "Decomposing Wage Distributions Using Recentered Influence Function Regressions," Econometrics, MDPI, vol. 6(2), pages 1-40, May.
    53. Holger Stichnoth & Karine Van der Straeten, 2013. "Ethnic Diversity, Public Spending, And Individual Support For The Welfare State: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 364-389, April.
    54. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1061-1110.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Iv'an Fern'andez-Val & Franco Peracchi & Aico van Vuuren & Francis Vella, 2018. "Selection and the Distribution of Female Hourly Wages in the U.S," Papers 1901.00419, arXiv.org, revised Jan 2022.
    2. Borjas, George J. & Edo, Anthony, 2023. "Monopsony, Efficiency, and the Regularization of Undocumented Immigrants," IZA Discussion Papers 16297, Institute of Labor Economics (IZA).
    3. Richard Blundell & James P. Ziliak & Hugo Lopez, 2023. "Labour market inequality and the changing life cycle profile of male and female wages," IFS Working Papers W23/16, Institute for Fiscal Studies.
    4. Iv'an Fern'andez-Val & Aico van Vuuren & Francis Vella, 2023. "Marital Sorting, Household Inequality and Selection," Papers 2310.07839, arXiv.org.
    5. Ahrsjö, Ulrika & Niknami, Susan & Palme, Mårten, 2021. "Wage Inequality, Selection and the Evolution of the Gender Earnings Gap in Sweden," Research Papers in Economics 2021:3, Stockholm University, Department of Economics.
    6. Joyce Jacobsen & Melanie Khamis & Mutlu Yuksel, 2024. "Demography, Human Capital Investment, and Lifetime Earnings for Women and Men," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 50(3), pages 259-277, June.
    7. Iván Fernández‐Val & Aico van Vuuren & Francis Vella & Franco Peracchi, 2023. "Selection and the distribution of female real hourly wages in the United States," Quantitative Economics, Econometric Society, vol. 14(2), pages 571-607, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rodríguez Chatruc, Marisol & Rozo, Sandra, 2021. "How Does it Feel to Be Part of the Minority?: Impacts of Perspective Taking on Prosocial Behavior," IDB Publications (Working Papers) 11599, Inter-American Development Bank.
    2. Ahrsjö, Ulrika & Niknami, Susan & Palme, Mårten, 2021. "Wage Inequality, Selection and the Evolution of the Gender Earnings Gap in Sweden," Research Papers in Economics 2021:3, Stockholm University, Department of Economics.
    3. Riccardo Bruni & Alessandro Gioffré & Maria Marino, 2022. ""In-group bias in preferences for redistribution: a survey experiment in Italy"," IREA Working Papers 202223, University of Barcelona, Research Institute of Applied Economics, revised Nov 2023.
    4. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    5. Patricia Gallego Granados, 2019. "The Part-Time Wage Gap across the Wage Distribution," Discussion Papers of DIW Berlin 1791, DIW Berlin, German Institute for Economic Research.
    6. Claudia Olivetti & Barbara Petrongolo, 2008. "Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 621-654, October.
    7. Richard Blundell & Amanda Gosling & Hidehiko Ichimura & Costas Meghir, 2007. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," Econometrica, Econometric Society, vol. 75(2), pages 323-363, March.
    8. Alberto Alesina & Armando Miano & Stefanie Stantcheva, 2023. "Immigration and Redistribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 1-39.
    9. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    10. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    11. Bonaccolto-Töpfer, Marina & Castagnetti, Carolina & Rosti, Luisa, 2023. "Changes in the gender pay gap over time: the case of West Germany," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 57, pages 1-11.
    12. Lisa Simon, 2019. "Microeconometric Analyses on Determinants of Individual Labour Market Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 83.
    13. Cohn, Alain & Jessen, Lasse J. & Klašnja, Marko & Smeets, Paul, 2023. "Wealthy Americans and redistribution: The role of fairness preferences," Journal of Public Economics, Elsevier, vol. 225(C).
    14. Richard Blundell & James P. Ziliak & Hugo Lopez, 2023. "Labour market inequality and the changing life cycle profile of male and female wages," IFS Working Papers W23/16, Institute for Fiscal Studies.
    15. Victor Chernozhukov & Ivan Fernandez-Val & Siyi Luo, 2023. "Distribution regression with sample selection and UK wage decomposition," CeMMAP working papers 09/23, Institute for Fiscal Studies.
    16. Olivier Bargain & Victor Stephane & Jérôme Valette, 2022. "Another brick in the wall. Immigration and electoral preferences: Direct evidence from state ballots," Review of International Economics, Wiley Blackwell, vol. 30(5), pages 1452-1477, November.
    17. Gallego Granados, Patricia & Wrohlich, Katharina, 2019. "Selection into Employment and the Gender Wage Gap across the Distribution and over Time," IZA Discussion Papers 12859, Institute of Labor Economics (IZA).
    18. Boll Christina & Rossen Anja & Wolf André, 2017. "The EU Gender Earnings Gap: Job Segregation and Working Time as Driving Factors," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(5), pages 407-452, October.
    19. de Bresser, Jochem & Knoef, Marike, 2021. "Preferences for Income Redistribution : A New Survey Item and Experimental Evidence," Other publications TiSEM 246972d6-0fdb-4243-9e34-2, Tilburg University, School of Economics and Management.
    20. Francine D. Blau & Lawrence M. Kahn, 2006. "The U.S. Gender Pay Gap in the 1990S: Slowing Convergence," ILR Review, Cornell University, ILR School, vol. 60(1), pages 45-66, October.

    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:28855. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.