Gender and potential wage in Europe: a stochastic frontier approach

Abstract

Purpose

The purpose of this paper is to provide evidence concerning wage differentials and the existence of gender pay discrimination in France, Germany, Italy, Spain and the United Kingdom.

Design/methodology/approach

The authors used the stochastic frontier approach as an alternative method to measure the relevance of gender discrimination. This methodology allows them to explain the differences between the potential and the observed wage that an individual could obtain, given his or her human capital endowment.

Findings

The authors found support for wage discrimination against women. The results show that a significant part of the gender wage gap in all the countries analysed is not attributable to differences in human capital endowment or personal and job‐related characteristics.

Research limitations/implications

The definition of education in the data set is modest and broadly defined.

Originality/value

This paper contributes to the debate on gender discrimination by analysing the determinants of the gender gap using an innovative methodology in the gender gap literature: the stochastic frontier approach.

Citation

Ángeles Díaz, M. and Sánchez, R. (2011), "Gender and potential wage in Europe: a stochastic frontier approach", International Journal of Manpower, Vol. 32 No. 4, pp. 410-425. https://doi.org/10.1108/01437721111148531