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From Gross Wages to Net Household Income: a Distributional Analysis of the Gender Wage Gap

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  • Gallego Granados, Patricia
  • Geyer, Johannes

Abstract

Numerous studies analyze gender wage differences focusing on gross hourly wages. The analysis of differences in gross wages allows statements on productivity differences between men and women and to quantify the unexplainable wage gap which is often attributed to discrimination. While there is plenty evidence that the gender (gross) wage gap is a persistent labor market phenomenon, less is known about its effects on the income distribution. In this paper, we therefore go a step further and ask how differences in gross wages in particular the unexplained gap show up in disposable income and its distribution. This is particularly relevant from a policy perspective because of its implications for income inequality and working incentives. The empirical analysis is carried out for West Germany with data from the GSOEP pooled for the years 2006 to 2011. Germany is an interesting case because it is one of the few countries with a system of joint taxation for married couples. This leads to high marginal tax rates for second earners and affects after-tax income differences between men and women.

Suggested Citation

  • Gallego Granados, Patricia & Geyer, Johannes, 2014. "From Gross Wages to Net Household Income: a Distributional Analysis of the Gender Wage Gap," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100492, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100492
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    1. Tom Kennedy & Russell Smyth & Abbas Valadkhani & George Chen, 2017. "Refitting the Kuznets curve using a gender-specific threshold model," Applied Economics, Taylor & Francis Journals, vol. 49(19), pages 1847-1854, April.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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