Differences in positions along a hierarchy : Counterfactuals based on an assignment model

Laurent Gobillon (Paris School of Economics-CNRS), Dominique Meurs (University of Nanterre (EconomiX), Chaire Travail (PSE) and INED), Sébastien Roux (Insee-Dese-Département des études économiques, CREST and INED)

Documents de travail
No 2021-02
Paru le :Paru le22/11/2021
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Laurent Gobillon (Paris School of Economics-CNRS), Dominique Meurs (University of Nanterre (EconomiX), Chaire Travail (PSE) and INED), Sébastien Roux (Insee-Dese-Département des études économiques, CREST and INED)
Documents de travail No 2021-02- November 2021

We propose an assignment model in which positions along a hierarchy are attributed to individuals depending on their characteristics. Our theoretical framework can be used to study differences in assignment and pay-offs across groups and we show it can motivate decomposition and counterfactual exercises. In an application, we study gender wage disparities in the public and private sectors with a French dataset. The gender wage gap in the public sector is 13.3 % and it increases by only 0.7 percentage points when workers are assigned to job positions according to the rules of the private sector.