Unequal Pay or Unequal Employment? A Cross‐Country Analysis of Gender Gaps

We analyze gender wage gaps correcting for sample selection induced by nonemployment. We recover wages for the nonemployed using alternative imputation techniques, simply requiring assumptions on the position of imputed wages with respect to the median. We obtain higher median wage gaps on imputed rather than actual wage distributions for several OECD countries. However, this difference is small in the United States, the United Kingdom, and most central and northern EU countries and becomes sizable in southern EU countries, where gender employment gaps are high. Selection correction explains nearly half of the observed negative correlation between wage and employment gaps.