Abstract

In this paper, we estimate a search model of the labor market with participation decisions, search frictions, match-specific heterogeneity and taste discrimination (à la Becker) for skilled workers. The model is used to identify the impact of pure discrimination from the influence of other gender-specific labor market characteristics, such as unobserved productivity and differences in the labor market dynamics by gender. The model is estimated using data from eight Latin American countries. Our full flexible model accurately replicates the observed gender wage gaps in the data, not only on average but also at the top and bottom of the wage distribution. Wage gaps are larger at the top than at the bottom of the distribution. There is a large amount of heterogeneity in the sources of wage gaps (productivity, prejudice, dynamics of the labor markets) by country. Both productivity and prejudice are important sources of wage gaps. While on average, prejudice is not the main source of wage gaps for skilled workers in all countries, prejudice does generate higher wage gaps at the bottom of the distribution. At the top, productivity is the main force behind wage gaps.