The male-female wage gap: Abilities, discrimination, chance or choice?

Attempts to explain the observed gender gap in earnings are either based on labor market discrimination; on intrinsic gender differences; on specialization in the family; or on non-convexities precluding gender-symmetric equilibria. The broader aim of the proposed project is to unify the existing theories and test those using coupled Norwegian data. It is well documented that men are better paid than women, and that a large part of the earnings gap vanishes if we control for differences in education and job experience, while another large part remains unexplained by these background variables. Demand-based explanations for the observed gender gap stress differences in the way men and women are treated in the labor market. In contrast, supply-side explana tions stress differences in the way men and women approach the labor market. It is often suggested that women are or at least seem to be less "dedicated" to paid work: they tend to acquire less education, they work shorter hours, they have more absences, and they do not seek well-paid jobs to the extent that men do. What the women do instead is to have the main responsibility for running the household. Specialization in the household can feed a self-fulfilling prophecy: if women expect to do most of the h ousehold work while men expect to be responsible for collecting most of the incomes of the family, women will rationally invest less in labor market skills and more in domestic skills, and once families have formed, it makes sense for the spouses to speci alize according to the traditional gender roles. Each of the existing theories of the wage gap can be improved, and there is also a need for a study of how the different explanations blend. Possible empirical sub-projects should take advantage of the qu ality of the Norwegian registry data, for example to explain potential differences in gender wage gap not explained by education and occupation data.