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Title: Estimation of the gender pay gap using linear mixed models Authors:  Maria Jose Lombardia - Universidade da Coruna (Spain)
Cristina Rueda - University of Valladolid (Spain)
Esther Lopez Vizcaino - Universidade da Coruña (Spain) [presenting]
Abstract: An often used methodology to study labor market differences between men and women is to decompose the pay gap into a portion that is due to differences in group characteristics and a portion that cannot be explained by such differences. In this sense, the Blinder-Oaxaca decomposition divides the wage differential between two groups: one part that is explained by group differences in productivity characteristics, such as education or work experience, and a residual part that cannot be accounted for by such differences in wage determinants. This no-explained part is often used as a measure for discrimination, but it also takes in the effects of group differences in unobserved predictors. The Blinder-Oaxaca decomposition has been widely used in the study of labor market discrimination. The objective is to introduce a novel approach to the analysis of wage discrimination with methods that are robust to model (mis-)specification. Following this idea, we apply linear mixed models for the Oaxaca-Blinder decomposition of wage differentials between men and women. Also, we use the small area estimation (SAE) methodology to analyze the wage differentials by economic activities in the region of Galicia (Spain).