We investigate diﬀerent techniques to assess the gender pay gap in five EU countries (France, Germany, Italy, Spain and United Kingdom), focusing on self-selection into market work. Results show that selectivity correction has an impact on both wage estimates and wage gap decomposition. If there is a positive correlation between the wage and the propensity to participate, the estimated pay gap understates the true diﬀerence in earnings when self-selection is ignored. The estimated pay gap diﬀers considerably at diﬀerent quantiles of the wage distribution, and is sensitive to the choice of estimator.
Beblo, Miriam, Denis Beninger, François Laisney and Anja Heinze (2003), Measuring Selectivity-Corrected Gender Wage Gaps in the EU, ZEW Discussion Paper No. 03-74, Mannheim. Download