How much do differences in majors’ choice affect the gender wage gap?

Details

Supervisors

Vandenberghe, Vincent ; Bucci, Alberto

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité approfondie

Abstract

This master’s thesis examines in which measure the gender wage gap can be considered as a discrimination and when, instead, it is due to workers’ characteristics and choices: in particular, their propensity to segregate in different majors (i.e., fields of study) when they attend tertiary education. To address this issue, an econometric technique - Gelbach decomposition - is used to decompose the contribution of different variables to the overall difference in salary between men and women, specifically the part that can be ascribed to the fact that men and women do not choose the same majors. The key result of the paper is that a gender wage gap of 17.13% in the Belgian private economy can be explained to almost 4% by the propensity of women and men to differ as to the major they attend and graduate from. Another 4% can be ascribed to differences in variables such as the sector of employment, the occupation, the experience in the labour market, and the commuting time to go to work. Finally, slightly more than 9% amounts to what, by default, can be considered as wage discrimination. These results highlight the importance of “pre-labour market entrance” mechanisms in explaining the persistence of a sizeable gender wage gap in advanced economies. From a policy point of view, they suggest that the closing of that gap is conditional on the reduction of the still important asymmetries that exist across gender in terms of majors’ choice when it comes to the major they choose at the end of high school. In particular, the low propensity of young women to attend STEM programs and, symmetrically, that of young men to attend those which predestine to “care” professions. The thesis is structured as follows. Section 1 introduces the subject of discussion and describes the main tools which will be useful for the empirical analysis. Section 2 covers a brief literature review about the topic and refers to the primary papers which already focused on a similar research question. Section 3 presents the empirical analysis and its main results. Section 4 concludes. Tables can be found in the Appendix (Section 5).