The multiple dimensions of selection into employment

A vast literature on gender wage gaps has examined the importance of selection into employment. However, most analyses have focused only on female labor-force participation and gaps at the median. The Great Recession questions this approach, not only because of the major shift in male employment that it implied but also because women’s decision to participate seems to have been different along the distribution, particularly because of an “added worker effect”. This presentation uses the methodology proposed by Arellano and Bonhomme (2017) to estimate a quantile selection model over the period 2007–2018. Using a tax and benefit microsimulation model, I compute an instrument capturing the male selection induced by the crisis as well as female decisions: the potential out-of-work income. Because my instrument is crucially determined by the welfare state, I consider three countries with notably different benefit systems—the U.K., France, and Finland. My results imply different selection patterns across countries and a sizeable male selection in France and the U.K. Correction for selection bias lowers the gender wage gap and, in recent years, reveals an increasing shape of the gender gap distribution with a substantial glass ceiling for the three countries.