Gender Income Disparity Among White-Collar Regular Employees: Explaining the Causes Responsible for 80% of the Disparity and Its Mechanisms

This chapter presents the results of the decomposition analysisDecomposition analysis of the gender income disparityGender income disparity among white-collar regular employees using the DFL model, which relies on propensity scorePropensity score standardization. First, the main results of the analysis show that six variables collectively explain 78% of the disparity. Gender differences in three human capitalHuman capital variables for age, educational attainmentEducational attainment , and years of serviceYears of service account for 35% of the gender income disparityGender income disparity , whereas three variables for occupation, working hours, and positional rankPositional rank account for additional 43%. Individually, gender differences in positional rankPositional rank possess the strongest explanatory power. Next, the disparity in the portion that cannot be explained by gender differences in the six variables is analyzed. Also demonstrated is the degree by which decreases in gender income disparityGender income disparity vary among each of the categories of age, educational attainmentEducational attainment , occupation, working hours, and positional rankPositional rank given the hypothetical situations when human capitalHuman capital characteristics are equalized between men and women and when positional rankPositional rank is also equalized between men and women. The following results were obtained. (1) The tendency for gender disparities in income to increase with age is mostly explained by increases in gender disparities in positional rankPositional rank after the age of 40. (2) Most of the gender disparity in income among college graduates can be resolved by eliminating gender differences in years of serviceYears of service and positional rankPositional rank , whereas most of the gender income disparityGender income disparity among advanced training school graduates can be gotten rid of by eliminating differences in positional ranksPositional rank . However, a large portion of the gender disparity in income among high school graduates cannot be eliminated even with identical years of serviceYears of service and positional rankPositional rank . (3) Large gender income disparities remain among professionals and among female-dominated clerical workers even when human capitalHuman capital and positional rankPositional rank are equalized between men and women. (4) The realization of gender equality in income opportunities among men and women employed in the position of section chief ( kacho Kacho ) and above is much greater than those of lower positional ranks.