The Early‐career Gender Wage Gap among University Graduates in the Finnish Private Sector

Abstract In the Finnish private sector, the gender wage gap increases significantly during the first 10 years after labour market entry, accounting for most of the lifetime increase in the gender wage differentials. This paper investigates the reasons for this gender difference in early‐career wage development. By focusing on university graduates the paper considers several explanations based on the human capital theory, job mobility, and labour market segregation. The results suggest that only about 20–26 per cent of the average early‐career gender wage gap is explained by gender differences in experience, the field of education, employer characteristics, and mobility. A substantial unexplained gap thus remains. Of the investigated factors gender differences in the field of education and work experience matter most.