Is the gender wage gap declining in the Netherlands?

Abstract

In this paper I try to answer the question whether the gender wage gap in the Netherlands is declining. I posed this question because on several other indicators labour market differences between men and women in the Netherlands declined or disappeared altogether. First of all the labour market participation of women has increased and women on the labour market are no longer a small minority. Second, the difference in productive characteristics between men and women is disappearing. Third, both product and labour markets have become increasingly competitive, due to changes in regulation like anti-trust laws, which should have an effect on the gender wage gap.

Contrary to these expectations I did not find a declining gender wage gap. The data in Dutch Institute for Labour Studies (OSA) labour supply panel show a steady gender gap of approximately nineteen per cent. At most twenty-five to thirty per cent of the gap can be explained by productivity differences. The largest part of the gender wage gap is due to ‘price’ differences. Both cross-section and panel analyses give the same answer.

Notes

¹ Differences between educational levels are 2 to 3 years of schooling. So obtaining a higher educational degree increases wages with somewhere between 6 and 9%.