The Journal of Economic Inequality

, Volume 14, Issue 1, pp 21–40 | Cite as

A distribution-sensitive examination of the gender wage gap in Germany

Article

Abstract

This paper provides a new examination of the gender pay gap for Germany based on a family of distribution-sensitive indicators. Wage distributions for men and women do not only differ by a fixed constant; differences are more complex. We show that focusing on the bottom of the wage distribution reveals a larger gender gap. Our distribution-sensitive analysis can also be used to study whether the statistical disadvantage of women in average pay might be ‘offset’ by lower inequality. Over a broad range of plausible preferences over inequality, we show however that ‘inequality-adjusted’ estimates of the gap can be up to three times higher than standard inequality-neutral measures in Eastern Germany and up to fifty percent higher in Western Germany. Using preference parameters elicited from a hypothetical risky investment question in our sample, inequality-adjusted gender gap measures turn out to be close to those upper bounds.

Keywords

Gender gap Wage differentials Wage inequality Expected utility Risk aversion East and West Germany SOEP Singh-Maddala distribution Copula-based selection model 

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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Institut for East and Southeast European StudiesRegensburgGermany
  2. 2.Luxembourg Institute of Socio-Economic ResearchEsch-sur-AlzetteLuxembourg

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