Decomposition of the gender wage gap using matching: an application for Switzerland

In this paper, we investigate the gender wage differentials for Switzerland. Using micro data from the Swiss Labour Force Survey, we apply a matching method to decompose the wage gap in Switzerland. Compared to the traditional Oaxaca-Blinder decomposition, this nonparametric technique does not require any estimation of wage equations and accounts for wage differences that can be due to differences in the support. Our estimation results show that the problem of gender differences in the supports matter in explaining wage differentials. We can interpret these differences as a form of 'discrimination' which is reflected in wages because women face 'barriers to the entry' in accessing certain individual characteristics that men achieve. As a consequence, accounting for these differences in gender supports may be useful in terms of policy implications in promoting more equality between men and women.