Wage structure and gender earnings differentials: An international comparison

Using microdata to analyse the gender pay gap in ten industrialized nations, we focus on the role of wage structure-the prices of labour market skills-in influencing the gender gap. We find wage structure enormously important in explaining why the US gender gap is higher than that in most other countries. We conclude that the US gap would be similar to that in Sweden and Australia (the countries with the smallest gaps) if the United States had their levels of wage inequality. This finding reflects the larger penalty in the United States for those with low skill levels or employed in low-wage sectors.