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Gender Gap

We employ the Ben-Porath (1967) human capital model to study the evolution of the gender wage gap over the long run. We consider the effect of changing lifecycle profiles of female market hours. We find that the implied response in unobserved investment in human capital accumulation accounts for most of the long run gender wage gap dynamics. This finding is consistent with the labor economists’ view that changing selection on unobservables played a critical role in the gender wage gap dynamics. Our contribution is to make explicit and quantify the link between market hours and (unobserved) investment in human capital.

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https://doi.org/10.20955/wp.2022.025