published in: Industrial and Labor Relations Review, 2006, 59 (2), 243-266
We compare how U.S. and Danish gender wage gaps have developed between 1983 and
1995 using U.S. PSID and Danish Longitudinal Sample data. Using a new decomposition
method, we show that changes in returns to observable skills and ranking effects outweigh
women’s gains due to qualifications and account for a rising gap in Denmark, while these
effects cannot counter the large decline in the wage gap in the U.S. in this period. Increased
wage dispersion has a minimal effect on the gap in both countries. Women at the highest
decile in Denmark face the biggest increase in the gap, while in the U.S., the decline is
largest at the top and at the middle of the distribution.
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