The gender wage gap and the early-career effect: the role of actual experience and education level

Abstract

This paper studies how the gender wage gap develops with work experience throughout the career. The contribution is twofold. First, the analysis applies matched employer-employee register data with information on actual, rather than potential, experience. Second, the career effect of the gender wage gap is allowed to differ by workers’ education level. The male wage premium is small upon entry to the labor market, whereas it increases rapidly throughout the early career, before stabilizing. In contrast to the existing literature, the estimates reveal heterogeneity among high-educated workers, where the widening of the wage gap is much smaller for postgraduates than other college graduates.