A new approach to gender wage gaps in Chile

Abstract

The purpose of this study is to examine gender wage gaps in Chile using a new database, the Social Protection Survey (EPS) 2002-2006, which makes it possible to control for actual work experience and its timing. Potential work experience variables do not reflect the intermittent and discontinuous participation of women in the Chilean labour market. Corrections are also introduced for occupational selection, and two key variables are instrumented: education and work experience. Although there are still wage differences between men and women, the introduction of controls for actual work experience and the instrumentation of this work experience and education bring the hourly wage gap down to some 11% to 18%, figures much lower than those reported in earlier studies for Chile. Contrary to expectations, this gap has widened in recent years.