Ability, Schooling Choices And Gender Labor Market Discrimination: Evidence For Chile

Abstract

This paper presents a comprehensive analysis of the gender differences in the Chilean labor market. We formally deal with the selection of the individuals into schooling levels and its consequences on the gender gaps. Our approach allows for the presence of not only heterogeneity in observable variables but also unobserved heterogeneity. We link this unobserved heterogeneity to unobserved scholastic ability. In the analysis, we utilize a new and rich data set for Chile. This data set contains information on labor market outcomes (including labor history), on schooling attainment and schooling performance, and on a complete set of variables characterizing the family background of the individuals in the sample Our results show that there exist statistically significant gender differences in several dimensions of the Chilean labor market. Nevertheless, we show that these gaps critically depend on the schooling level of the individuals considered in the analysis. For example, the results indicate that there are no gender differences in labor market variables among college graduates (except in the case of hourly wages). We interpret our results with prudence. Specifically, instead of interpreting our findings as decisive evidence of the existence of discrimination in the Chilean labor market, we argue that future research based on better information might indeed explain some of the unexplained labor market gaps presented in this paper. In this context, our results represent a new and important attempt to provide a full understanding of the structural causes of gender gaps in the Chilean labor market but they are not conclusive.