Gender wage determinants: Theory and evidence

Over the past century, women's roles in society and their labor market participation have changed significantly. Even though there have been big steps toward equal pay for men and women in the workplace, the gender pay gap still exists in many places. Policymakers in certain states of the U.S. have enacted "gender pay discrimination" bans to combat the pervasive discrimination against women. These bans make it illegal to pay individuals differently based on their gender. The main goal of this thesis is to find out what causes the pay gap between men and women in the U.S. by focusing on how state bans affect the wages of women workers by using administrative data between the years 1997 and 2020. In this regard, based on the Solovian growth model, we first develop a theoretical framework with a steady state solution to investigate the long run determinants of the gender pay gap using an empirical pay gap model. Our theoretical model signifies the importance of the "share difference", defined as the difference between the shares of women and men in the total labor force. At state level, we test the importance of "share difference" in reducing the gender pay gap using state fixed effects and quantile regression techniques. While our findings highlight the significance of labor force participation, the effect is larger at higher quantiles. Regarding the gender pay discrimination bans, we conclude that the passage of a law against gender discrimination decreases the gender gap if the wage gap is narrow. At the household level, using the difference-in-differences (DID) technique and the human capital wage equation, we find that gender pay discrimination bans significantly increase women's wages, especially among the high-paid workers at the top of the wage distribution.