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Gender differences in the labour market : explaining the gender wage gap : empirical evidence from Norway

Dehli, Marte Mellesdal
Master thesis
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URI
https://hdl.handle.net/11250/2679896
Date
2020
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  • Master Thesis [3384]
Abstract
This master´s thesis aims to investigate potential sources of the gender wage gap using

Norwegian register data on the full population. First, I seek to understand to what extent

traditional human capital factors and other work-related characteristics contribute to the

gender wage gap. Using a traditional Oaxaca-Blinder decomposition method, I decompose

the male-female differentials from a cross-sectional perspective based on the study by

Blau and Kahn (2017). Second, I attempt to understand whether gender inequality is

due to children and if there is a motherhood penalty in earnings by adopting the event

study approach suggested by Kleven, Landais, and Søgaard (2018). By controlling for

maternal age and calendar year, the event study allows for capturing the effect of children

on female and male wages over time.

The O-B decomposition reveals that conventional human capital factors in aggregate

decrease the gender wage gap, while gender segregation in industries increases the gender

wage gap by a small share. As a result, most of the gender wage gap is due to unexplained

factors, which calls for a discussion for other potential explanations of the gender wage gap.

The event study reveals a significant child penalty in earnings for mothers, implying that

children have significant impacts on wages. This motherhood penalty suggests negative

selection into work and labour market adjustments around the childbirth. Whether the

drop in female wages is due to unprofitable choices or discrimination is hard to establish,

but it might be that both of them play a role to some degree.

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