Thesis supervisor: Professor Raul Eamets (PhD), University of Tartu
Opponents: Senior Research Fellow Kaire Põder (PhD), Tallinn Technical University
Professor Mihails Hazans (PhD), University of Latvia
The gender wage gap in Estonia is high. Previously, several studies have estimated how much of the gender difference in average wages can be explained by gender differences in characteristics such as education, occupation, industry etc. It has been found that most of the gender wage gap is unexplained by such differences.
The primary question addressed in this thesis is whether better explanations for the gender wage gap in Estonia could be obtained by using different methods and data than those used in previous studies. The dissertation consists of three studies:
Study I addressed the question of whether and to what extent the large unexplained gender wage gap is due to insufficiently detailed data. For example, if the category of professionals includes surgeons as well as librarians, a question arises whether wages of comparable workers are being compared. It was found that while using more precise data on occupation and industry reduces the unexplained wage gap somewhat, it nevertheless remains rather high (16.5%).
Study II addressed more technical questions regarding wage gap decomposition methods. It was shown that certain methods (exact matching based decomposition) the essentially arbitrary choice of reference group (that is, whether men’s advantage or women’s disadvantage is estimated) can lead to opposite conclusions. A modification of the method was proposed, which estimates separately advantage and disadvantage in comparison with overall average wage.
Study III tested whether there are gender differences in downward rigitity of wages. Using Tax Board data, it was found that women are more likely to accept wage reductions. A possible explanation for this result is that it reflects differences in risk aversion: men may be more likely to refuse pay reduction, accepting higher risk of layoff instead. This interpretation, however, is hypothetical and needs further research.