Discrimination by Parts: A Fixed-Effects Analysis of Starting Pay Differences across Gender

A unique employer-level data set is used to provide insight not only to the degree of discrimination that may exist , but also to the source of that potential discrimination. Results from decomposing individual wage equations indicate that, as legislatively defined, employers do not appear to be discriminating against their women hires to a large extent. When aggregated, however, the pay, job placement, and hiring discrimination estimates yield an overall discrimination estimate of a 6% gap in pay between men and women. These results suggest that a more comprehensive approach may be warranted in flagging possible discriminatory behavior.