Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282225 
Year of Publication: 
2023
Series/Report no.: 
KRTK-KTI Working Papers No. KRTK-KTI WP - 2023/04
Publisher: 
Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies, Budapest
Abstract: 
The gender earnings gap can be attributed either to the different distribution of males and females across jobs or to within job biases in favour of men. The latter is frequently called the wage structure effect, and it may be interpreted as wage discrimination against women. In this paper we focus on this second source of the gap. In particular, we study the heterogeneity of the wage structure effect by looking for the main drivers of it. On Hungarian matched employer-employee data we identify those firm-worker profiles that exhibit extremely high gender wage differentials We apply the Causal Forest methodology, borrowed from the conditional average treatment effect (CATE) literature, which has been utilized in several observational studies, recently. Our findings show that those firms that pay relatively high wages tend to discriminate against women most strongly, and especially with respect to women who have spent a longer time in the same firm. But this tendency is moderated by regional effects; where demand side competition is strong the wage structure effect tends to be smaller. These findings are, by and large, in accordance with the view that relative bargaining power is relevant for wage-setting, or, alternatively, firms practice third degree wage discrimination.
Subjects: 
Gender pay gap
heterogeneous wage structure effects
random forest regression
JEL: 
J16
J31
C14
Document Type: 
Working Paper

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