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Gender Wage Differentials in Italy: A Structural Estimation Approach

  • Mathematics


This paper studies gender wage differentials in Italy by providing a structural estimation of the frictional parameters of two different theoretical specifications of an equilibrium search model. I alternatively allow for firm heterogeneity and discrimination empirically using maximum likelihood and matching first moments in the data. Results indicate substantial differences in transition parameters with higher level of search frictions for women. The mapping from productivity to wages for men is highly non linear, with high productivity firms offering proportionally higher wages; for women, the relationships is almost linear. Including discrimination, I find that productivity accounts for 61% of the wage offer differential, search for 28% and 11% is the part of discrimination.

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