GEWADI · Role of Educational Systems on Entry Level Wage Differences

The gender wage gap has narrowed from the 1960s, mainly due to the increase of female education, work experience and female workforce participation, however, it still remains. Across EU countries, in 2015 women earned on average 16.3% less than men, and this gap has only marginally declined from 18.6% in 2000 . In the US, women working full-time earn just 81.9% of men’s salaries in the same period. The gender wage gap literature can be divided according to their findings at the entry level and along the career path. While the literature agrees that wages grow faster for men than for women throughout their careers, evidence of wage differences at the entry level is mixed. Conclusive evidence about the existence of early wage differences will improve our knowledge of how labor markets work, will help identify the sources of wage discrimination, and will guide policy decisions towards reducing gender differences along the career path. Despite their impact on early-career wage differences, countries’ distinct educational systems and ages of the studied cohorts have not been taken into account in earlier analyses.The aims of this fellowship consist in (a) answering whether gender wage discrimination is present at early career stages, and (b) investigating the role of the educational systems on early wage discrimination. We will estimate the structural parameters of initial wages (intercepts) and their growth rate (slopes) for men and women considering the potential future investments in HC. Using some of the best longitudinal data sets currently available for the US (National Longitudinal Survey of Youth - NLSY) and Switzerland (Swiss Household Panel – SHP, and Longitudinal Analysis in the Field of Training - LABB), we will compare entry level wages and their evolution from two countries with different educational systems (VET and Academic Track).