Abstract

The wage gap between men and women is mostly subdivided into explanations related to gender differences in endowments (e.g., age, education, work experience) and in coefficients. The latter is the so called adjusted wage gap and shows which part of the wage gap is due to the fact that the same endowment generates different market returns for male and female workers. Empirically, the gender wage gap is almost exclusively analyzed using cross section data, which features the disadvantage of not considering unobserved individual and firm heterogeneity. However, these unobservables could be important to assess more accurate the endowment and coefficient contributions.