The Mincer Equation. The Gender Gap in Austria

Essay from the year 2014 in the subject Business economics - General grade: 1.5 Trinity College Dublin (Economics) course: MSc. Economics language: English abstract: Within this project I examined the influence of different determinants on the hourly wages of Austrian employees. As a basis I used a workhorse in Labour Economics the Mincer Equation. I also extended the model by determinants that seem country specifically important for Austria according to previous literature: the gender gap and the east-west divide. However first I test how good the original equation describes the data (EU SILC 2007) for Austria more than thirty years after its publication. Implying my new variables I find that women earn about 26.2% less than men which results in a very big gender gap compared to other developed countries in the European Union. Surprisingly I could not find any significant difference for the nine federal states which rejects my hypothesis of an east-west divide. Furthermore the additional income due to increasing experience seems to be nearly linear as the impact of the squared term is extremely small.