Movin’ on Up: Hierarchical Occupational Segmentation and Gender Wage Gaps
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Our study evaluates and extends existing wage decomposition methodologies that seek to measure the contribution of endowments, pure wage discrimination, and job segregation. Of particular interest is the model of hierarchical segregation in Baldwin, Butler, and Johnson (2001). We employ data from a regional supermarket that faced a Title VII class-action lawsuit to examine how standard wage specifications integrated with a model of hirearchical segregation might perform in wage decompositions. Our results show that a common misspecification of the wage structure leads to false interferences about the presence of pure wage discrimination. We demonstrate the generalizability of our methodology using CPS data.