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Why Do Women's Wages Increase So Slowly Throughout Their Career? A Dynamic Model of Statistical Discrimination
Author(s) -
Havet Nathalie,
Sofer Catherine
Publication year - 2008
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.2008.00409.x
Subject(s) - human capital , wage , economics , investment (military) , labour economics , differential (mechanical device) , statistical discrimination , human capital theory , demographic economics , political science , engineering , aerospace engineering , politics , law , economic growth
. The aim of this paper is to explain the growing wage differentials between men and women during their working careers. We provide a dynamic model of statistical discrimination, which integrates specific human capital decisions: on‐the‐job training investment and wages are endogenously determined. We reveal a small wage differential at the beginning of women's career, but women's wages increase more slowly; this is partly due to a lower level of human capital investment by women and partly because firms smooth training costs between different periods.