The Econometric Society - 2024 ESEM Best Paper Award
Download
Abstract
Around 20% of the gender wage gap is due to women sorting into firms that pay lower wages. Using French matched employer-employee data, I investigate whether these gender differences in sorting reflect differences in preferences or opportunities. I employ a finite mixture approach à la Lentz, Piyapromdee, and Robin (2023) to estimate a model of wages and mobility. Using information on wages, mobility, and observed characteristics, this model classifies workers and firms into a finite number of types and classes. I allow wage profiles and mobility patterns of men and women of the same type to vary over different stages of workers’ careers. Counterfactual analyses reveal that over half of the sorting component of the wage gap is driven by differences in preferences, which are more salient among high-wage, mid-experience types. Differences in the job offer distribution following periods of non-employment across all types explain the remaining part.