Hidden in Plain Sight: Occupational Structure and the Gender Wage Gap
Published in Working Paper, 2026
We provide new evidence on how wage differences across firms shape the gender wage gap and highlight the role of gendered occupational segregation. We show that when occupations are omitted from canonical AKM models, the estimated firm effects mechanically absorb occupation-specific wage differences. We illustrate this mechanism through simulations and then quantify its empirical relevance using Danish register data. The estimated contribution of firm sorting to the gender wage gap declines by up to 30% once occupations are accounted for. Furthermore, around 90% of firm sorting occurs between industries, with women disproportionately employed in lower-paying ones. Our results demonstrate that gendered firm sorting is closely intertwined with occupational and industry segregation.
Recommended citation: Rosenball, R., Eibinger, T., Mulalic, I., and Kleinert, J. (2026). "Hidden in Plain Sight: Occupational Structure and the Gender Wage Gap" Working Paper. https://dx.doi.org/10.2139/ssrn.6148866