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Decomposing wage discrimination in Germany and Austria with counterfactual densities

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  • Grandner, Thomas
  • Gstach, Dieter

Abstract

Using income and other individual data from EU-SILC for Germany and Austria, we analyze wage discrimination for three break-ups: gender, sector of employment, and country of origin. Using the method of Machado and Mata [2005] the discrimination over the whole range of the wage distribution is estimated. Significance of results is checked via confidence interval estimates along the lines of Melly [2006]. To narrow down the extent of discrimination both basic decomposition possibilities are compared. The economies of Germany and Austria appear structurally very similar. Especially the institutional setting of the labor markets seem to be closely comparable. One would, therefore, expect to find similar levels and structures of wage discrimination. Our findings deviate from this conjecture significantly.

Suggested Citation

  • Grandner, Thomas & Gstach, Dieter, 2012. "Decomposing wage discrimination in Germany and Austria with counterfactual densities," Department of Economics Working Paper Series 145, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus005:3614
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    1. Marie Ligocká, 2022. "The Gender Wage Gap in EU Countries and its Relation to the Educational Attainment and Type of Employment," ACTA VSFS, University of Finance and Administration, vol. 16(1), pages 23-42.

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