We explore the penalties experienced by women as they age. We use the German SOEP to track their wages from the early stages in their career till retirement. We found that the GWG has step increase at the beginning of the career to become flatter after the productive age (over 45 years old). The results indicate that adequate policy action to reduce the GWG should take the age dimension into account.

1. DierencesintheEstimatesoftheGWG
overtheLifeCycle
Joanna Tyrowicz Lucas van der Velde Irene van Staveren
lvelde@wne.uw.edu.pl
Is the GWG constant? A little bit of theory
Predicted patterns: GWG over life cycle
→ Hump shape pattern
Division of roles inside the household
Gender-biased measurement of human capital
Statistical discrimination from employer
Expected breaks in the career
→ Dierences increasing over age years
Double penalty: value of women decreases when they
leave the reproductive age
Hysteresis eect: small dierences at the beginning
of the career add up to larger dierences
Our contribution
We decompose GWG accounting for age and
cohort specic eects.
- Single decomposition:
a) Use DiNardo, Fortin and Lemieux (DFL) de-
composition at dierent points of the wage dis-
tribution,
b) Use panel data analysis to separate age-
cohort-time eects.
- Double decomposition:
We adapt the DFL decomposition to study
changes in the raw GWG as people age.
GSOEP Sample
Our data source is the German Socio-Economic
Panel (GSOEP)
Panel for West Germany from 1984-2008.
Over 2000 observations in all years
Around 60 thousand individuals.
Sample
German nationals between 25 and 60.
Landers from East Germany excluded.
Sample description: Dierent cohorts of men and women
Results: GWG increases with age for all cohorts
Results from DFL decompositions Results from Panel Analysis Results from Double decomposition
Notes: dependent variable is gross hourly
wages, control variables include education
level, occupation level, tenure, experience,
dummy for part time employment.
Notes: dependent variable is the adjusted
GWG. Control variables include male and fe-
male participation rate, cohort xed eects
and a time trend. Condence intervals at the
10%. N= 175
Notes: dependent variable is the change in
the Adjusted GWG. As a control variable we
include the adjusted GWG at the beginning of
the period. Condence intervals at the 10%,
bootstrapped SE with 1000 repetitions
Robustness checks: controlling for additional trends
Mean q(.25) q(.75) Mean q(.25) q(.75) Mean q(.25) q(.75)
30-34 0.16*** 0.06 0.15*** 0.12*** 0.06 0.07 0.13*** 0.11*** 0.05
(0.04) (0.05) (0.08) (0.05) (0.05) (0.08) (0.04) (0.04) (0.05)
35-39 0.17*** 0.06 0.16*** 0.12*** 0.04 0.10 0.13*** 0.08*** 0.07*
(0.04) (0.05) (0.07) (0.04) (0.04) (0.07) (0.04) (0.04) (0.05)
40-44 0.21*** 0.14*** 0.18*** 0.15*** 0.10*** 0.13*** 0.16*** 0.13*** 0.11***
(0.04) (0.05) (0.07) (0.04) (0.04) (0.06) (0.03) (0.03) (0.04)
45-49 0.22*** 0.18*** 0.17*** 0.15*** 0.13*** 0.14***
(0.04) (0.05) (0.071) (0.03) (0.04) (0.06)
50-54 0.21*** 0.17*** 0.15** 0.11*** 0.08*** 0.11***
(0.05) (0.05) (0.08) (0.03) (0.04) (0.05)
55-59 0.43*** 0.44*** 0.32*** 0.26*** 0.27*** 0.26***
(0.09) (0.10) (0.15) (0.06) (0.071) (0.10)
% female -1.01*** -1.13*** -0.08
main earner (0.33) (0.38) (0.57)
% Tertiary -0.64* -1.41*** 1.32**
educated female (0.44) (0.49) (0.71)
Places for kids 3 0.01 0.01*** -0.04
(0.004) (0.01) (0.06)
R-squared 0.461 0.456 0.269 0.434 0.455 0.286 0.443 0.425 0.282
Notes: Dependent variable is the adjusted GWG. Controls include male and female participation rate and a time trend.
N=175
Conclusions
→ We separate cohort and age eects to
understand changes in the GWG over age years.
→ General pattern: large increases in the
early career years that stabilize when leaving
the productive age.
→ Life cycle eects appear to be dierent de-
pending on the quantile of the wage distribution
that we focus in.
→ Variables connected to cohort specic
trends, such as child-care availability or im-
provements in women's position in the house-
hold do not aect our main results.
Acknowledgements
This research was supported by a grant from the National Science Centre, UMO-2012/05/E/HS4/01510. We also want to thank the members of GRAPE and the participants of
the WIEM 2015 conference for their useful comments and suggestions. Usual disclaimer applies.