Gender wage differentials in Italy: a structural estimation approach
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This paper studies gender wage differentials by providing a maximum likelihood structural estimation of the frictional parameters of an equilibrium search model with on-the-job search and firm heterogeneity. In a second step, I also consider the role of discrimination. Results indicate higher level of search frictions for women; this result is confirmed by various robustness checks and by different specification and estimation strategies. I also find that the resulting mapping from productivity to wages for men is highly non-linear, while for women it is almost linear. Search, productivity and discrimination play different roles in shaping the gender differential depending on the specification and estimation of the model.
KeywordsGender differentials Equilibrium search Discrimination
JEL ClassificationJ31 J41
This paper is based on Chapter 2 of my Ph.D. dissertation at the University of Essex, UK. Thanks to Melvyn Coles and Amanda Gosling for the support and advice and to Barbara Petrongolo and Michele Belot for their comments. Particular thanks also to Dale Mortensen, Bruno Contini, the editor of this journal, Jim Albrecht, and two anonymous referees for comments and suggestions that substantially improved the paper. I also thank participants at the Georgetown University Econometrics Seminar; at the Labour Market Dynamic Growth Conference in Sandbjerg, Denmark; at the Labor Market Flows, Productivity and Wage Dynamics Workshop in Turin; at the Evolution of Inequalities in Italy Workshop in Rome; at the 3rd ICEEE Conference in Ancona and at a seminar at the University of Salerno for their comments and suggestions. Financial help from the Italian Ministry of Education, PRIN Project 2005132317 “L’evoluzione delle disuguaglianze nel mercato del lavoro in Italia tra cambiamento tecnologico e modifiche istituzionali” is gratefully acknowledged. Part of the revision process of this paper was conducted while I was visiting the Department of Economics at Georgetown University; I thank that institution and the academic staff for their hospitality and the very stimulating environment. Of course, I am solely responsible for all remaining errors and misinterpretations.
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