No. 2/2016:The gender wage gap and the early-career effect


This paper identifies the sources of the gender wage gap across education groups and studies how the gap develops with work experience throughout the career. The analysis applies matched employer-employee register data for Norway covering hourly wages for all full-time workers 20-40 years old in 2008 and with information on actual work experience the previous 15 years. Overall, less than half the male wage premium is explained by differences in observable factors. The remaining gap follows from lower returns to worker characteristics for women, especially lower returns to experience. The gender wage gap between observable equal workers is non-existing upon entry to the labor market, while it increases rapidly throughout the early career, before stabilizing. The findings of early-career effects are robust to an analysis following cohorts during 1993-2008. The degree of gender discrimination in the labor market decreases with the level of education. Low educated women have lower returns to experience and lose more from entering family life compared to highly educated women.