Life-time wage profiles in the female labor market
Soto-Alvarez, Francisco Javier
Vella, Francis G. M.
Master of Arts
The study finds evidence of a cohort effect in female to male wage differentials caused by a greater earnings growth across generations. This imply a steeper female wage profile than is commonly accepted in the literature. The results presented in this paper also support the findings of Gold and Vella (1991) and Vella (1991). There is a significant impact from correcting for endogeneity of experience and education in the estimation of the wage equation. This finding is important since it implies that ignoring the correction for endogeneity will lead to problems of inconsistency in the estimation of the parameters. Our results show that this inconsistency leads to underestimation of the impact of experience in the wage equation.
Labor economics; Women's studies