Gender wage gaps and economic crisis in Greece

ABSTRACT

We examine gender wage gap (GWG) in Greece for 2013, by using a survey data set. Our findings show first, that the unadjusted GWG is 15.3%, while European Commission reports a value of 15%. Secondly, we derive the ‘adjusted’ GWG, using the Oaxaca and Ransom (OR) and the Juhn, Murphy and Pierce (JMP) methods to be ranging from 10% to 13.6%. Thirdly, looking into the behaviour of the full population, we find a decreasing trend for the discrimination effects, an increasing trend for the residuals effects and a ‘random’ endowments effects while moving to higher deciles. These three effects are associated to the economic crisis 2008–2015. Fourthly, our findings do not show evidence of either a ‘glass ceiling’ effect or a ‘sticky floor’ effect. Finally, that there is strong evidence that investing in higher education reduces the wage discrimination between sexes.

KEYWORDS:

• Gender differences in the labour market
• gender wage gaps
• Mincer equation
• Oaxaca-Blinder decomposition
• Quantile regression

JEL CLASSIFICATION:

• J31
• J71

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Child, elderly care, household activities.

2. See the ‘Data description’ subsection 3.1 for more details.

3. See Kanellopoulos and Mavromaras (2002), Karamessini and Ioakimoglou (2007, 2003), Christofides, Polycarpou, and Vrachimis (2013) and Nikodemo (2009).

4. The caveats of the JMP method are discussed in detail by Yun (2007).

5. Gürbüz and Polat (2016) use QR models for their decomposition analysis on public-private sector wage differentials by gender in Turkey for the years 2005–2013. They also use the standard JMP decomposition.

6. See e.g. Ijsmi (2017).

7. Sticky floor is a barrier keeping females trapped at the bottom of the payment scale, while Glass ceiling is a barrier preventing females to moving to the top.

8. We are indebted to an anonymous referee for this comment.

9. See e.g. Christopoulou and Monastiriotis (2016).

10. A possible weakness of the dataset is that, due to budget limitations, the survey for the collection of data from graduates was conducted among graduates from three Greek Universities. Future research could expand the data collection to include graduates from all Greek Universities.

11. Performing equality tests for the mean (assuming equal or unequal variances) and testing that the ratio of the two standard deviations is unity, we find strong evidence against both null hypotheses.

12. The decompositions we present can be generalized for groups A and B; however, since our interest is wage gaps between male (M) and female (F) workers, we use the notation of M and F groups.

13. Recent studies on GWG, like Furno (2013, 2016), and Gürbüz and Polat (2016) employ the Oaxaca-Blinder decomposition.

14. The terms in parentheses are used in Juhn et al. (1993).

15. Chernozhukov et al. (2008) point out that 100 regressions tend to be enough for quantile models, but low for the rest estimators.

16. Analysing the results from JMPD and JMPD* with 10,000 replications and 100 regressions for the conditional model, the statistical significance of the wage differentials and their decompositions do not change.

17. Unemployment remained at 22% in March 2017 (Greek Statistical Agency). The Foundation for Economic & Industrial Research (IOBE) reported in July 2017 that 36% of those graduated from university after 2011 were unemployed.

18. Detailed statistical data is reported in Table A in Appendix.

19. See http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=migr_emi1ctz&lang=en.

20. According to the Greek Medical Association during the recession about 18,000 medical doctors have emigrated abroad (see, e.g. newspaper Kathimerini 6–11-2016).

21. Emigration outflows are generated by large unemployment rates, wage cuts and economic uncertainty; see, e.g. Labrianidis and Vogiatzis (2013), Labrianidis and Pratsinakis (2013) as well as Lyberaki and Tinios (2017).

22. Eurostat reports GWG up to the year 2010.

23. That is equivalent to first-year university enrolment.

24. By definition of GWG, periods off the labour market and a low activity/participation rate in general, affect hourly pay thus GWG see Blau and Kahn (2016).

25. See also Blau and Kahn (2016) for an excellent survey of the role of norms in GWG.

26. The median values of the characteristics effect of the nine deciles in the JMP, JMP* and JMP** decompositions are 3.7%, 3.3% and 3.8% respectively, while the mean value of the characteristics effect using the OR decomposition is 4.8%. The corresponding values for the coefficients effect in the JMP, JMP*, JMP** and OR decompositions are 6.3%, 7.6%, 8.7% and 5.2%.

27. This is in line with Figure 8, where one can contrast the stable activity rate for men in the long run with the large increases in women activity for the same time interval.

28. The median value of the nine deciles is 13.6%.

29. The decreasing trend for discrimination effects and the increasing for the residuals effects while moving to higher wage deciles of wage distribution is an interesting finding and it is robust to all three QR models. This finding for the Greek economy is unique for the GWG analysis in economies under crisis; there are very few studies on the GWG in European economies under the recent financial crisis (Piazzalunga and Di Tommaso (2016) for Italy, Busch and Holst (2009) for Germany and Gonzalez (González 2014) for Portugal) but none of them uses QR.

30. Christopoulou and Monastiriotis (2016) report wage cuts for 2009–2013 of 22.5% for the public sector and 23.2% for the private sector.

31. Increasing or decreasing the threshold of 2% by 50 basis points, we find no evidence for glass ceiling effects.

32. See Table A in Appendix for the statistical data for Greece.

33. Standard deviations of the mean values are of a modest value.

Additional information

Funding

Agiomirgianakis and Tsounis acknowledge that this research was carried out as a research project co-financed by the European Union (European Social Fund – ESF) and Greek national funds through the Operational Program ‘Education and Lifelong Learning’ of the National Strategic Reference Framework (NSRF). Financial support is gratefully acknowledged. Helpful comments from an anonymous referee are gratefully acknowledged.