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Gender differences in reservation wages: New evidence for Germany

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  • Bonaccolto-Töpfer, Marina
  • Satlukal, Sascha

Abstract

Generally, women set lower reservation wages than men what may translate into substantial gender pay gaps in the labor market. This paper compares both parametric and semiparametric estimators to analyze unexplained gender gaps in reservation wages among non-employed individuals in Germany. We examine these estimators using both conventional and data-driven model specifications. The results suggest substantial unexplained gaps in favor of men (up to 8%). In addition, we show that the gaps are larger at the top of the reservation wage distribution as well as among individuals with children and with a high educational attainment. The estimates are robust across the various estimators and model specifications. These findings imply that pronounced unexplained gender gaps in reservation wages do exist in Germany. As they are likely to result in actual gender pay gaps, gender gaps in reservation wages should be on the political agenda.

Suggested Citation

  • Bonaccolto-Töpfer, Marina & Satlukal, Sascha, 2024. "Gender differences in reservation wages: New evidence for Germany," Labour Economics, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:labeco:v:91:y:2024:i:c:s0927537124001453
    DOI: 10.1016/j.labeco.2024.102649
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    More about this item

    Keywords

    Gender reservation wage gap; Data-driven models; Robust estimation;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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