The Gender Pay Gap across Countries: A Human Capital Approach

The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women'slifetime work behavior - a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertilityrate (treated exogenously and endogenously with religion as the instrument), positively associated with the husbandwifeage gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women's lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap.

Discerning Discrimination: Does Interviewing Firms Make a Difference?

This paper examines the problems generated by three firm-based analyses of discrimination. Besides the detailed difficulties associated with each of these studies, a common failing is ignoring worker behavior, an error that can cause considerable bias in estimating discrimination.Bias; Discrimination

Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study

Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a genetic score variable, are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We demonstrate that the same genetic score that predicts education is also associated with higher wages, but only among individuals with a college education. Moreover, the genetic gradient in wages has grown in more recent birth cohorts, consistent with interactions between technological change and labor market ability. We also show that individuals who grew up in economically disadvantaged households are less likely to go to college when compared to individuals with the same genetic score, but from higher socioeconomic status households. Our findings provide support for the idea that childhood socioeconomic status is an important moderator of the economic returns to genetic endowments. Moreover, the finding that childhood poverty limits the educational attainment of high-ability individuals suggests the existence of unrealized human potential

State Control and the Effects of Foreign Relations on Bilateral Trade

Do states use trade to reward and punish partners? WTO rules and the pressures of globalization restrict states’ capacity to manipulate trade policies, but we argue that governments can link political goals with economic outcomes using less direct avenues of influence over firm behavior. Where governments intervene in markets, politicization of trade is likely to occur. In this paper, we examine one important form of government control: state ownership of firms. Taking China and India as examples, we use bilateral trade data by firm ownership type, as well as measures of bilateral political relations based on diplomatic events and UN voting to estimate the effect of political relations on import and export flows. Our results support the hypothesis that imports controlled by state-owned enterprises (SOEs) exhibit stronger responsiveness to political relations than imports controlled by private enterprises. A more nuanced picture emerges for exports; while India’s exports through SOEs are more responsive to political tensions than its flows through private entities, the opposite is true for China. This research holds broader implications for how we should think about the relationship between political and economic relations going forward, especially as a number of countries with partially state-controlled economies gain strength in the global economy