Direct and Indirect Effects of Noncognitive Skills on the Gender Wage Gap

(2012) - Dimitrios Nikolaou

Journal: Ohio State University
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Tags:: #paper #NCDS #Gender #Income
Cite Key:: [@nikolaouDirectIndirectEffects2012]

Abstract

Prior research finds that noncognitive skills have a moderate effect on gender wage differences. I ask if existing studies underestimate this effect because noncognitive skills affect worker productivity (the direct effect) and occupational choice (the indirect effect). Using data from the National Child Development Study and jointly modeling gender-specific occupational attainment and wage determination, I find that the magnitude of the contribution of noncognitive skills to the gender wage gap is underestimated by 18 percentage points when the indirect effect is overlooked. I also show that this contribution differs with age. At age 33, women directly benefit because of higher productivity in noncognitive skills, while, at age 50, women benefit indirectly because they have sorted into occupations that reward these skills. I conclude that noncognitive skills are indeed significant for explaining the gender wage gap, particularly among mid-career workers.

Notes

“At age 33, women directly benefit because of higher productivity in noncognitive skills, while, at age 50, women benefit indirectly because they have sorted into occupations that reward these skills.” (Nikolaou, 2012)

“oncognitive skills are indeed significant for explaining the gender wage gap, particularly among mid-career workers.” (Nikolaou, 2012)