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Pay gaps and outside wages: The U.S. gender wage gap 1980-2010

Author

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  • Bidner, Chris
  • Sand, Ben

Abstract

We consider the role of differences in outside wages-the wages earned by similar workers in other jobs-in shaping pay differentials, focusing on the gender dimension in the U.S. during 1980-2010. Using instruments that exploit differential exposure to common industry wage shocks, we find a substantial role for outside wages. Differences in outside wages account for one-half of the level of, and trends in, the unexplained gender wage gap. Our results offer a reinterpretation of trends in the gender wage gap, and suggest that standard wage decompositions are systematically misleading.

Suggested Citation

  • Bidner, Chris & Sand, Ben, 2024. "Pay gaps and outside wages: The U.S. gender wage gap 1980-2010," CLEF Working Paper Series 82, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    • Handle: RePEc:zbw:clefwp:308052
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