The Gender Wage Gap and Sex Segregation in Finland

This paper investigates how the segregation of women and men into certain occupations, industries, firms and jobs within the firms is reflected in the gender wage gap in the Finnish manufacturing sector. Using matched employer-employee data we evaluate wage differentials between men and women doing the same kind of job for the same employer. This allows us to differentiate between wage differentials caused by human capital differences, wage differentials resulting from labour market segregation and within-job wage differentials. We find that at least half of the gender wage gap can be attributed to labour market segregation while human capital differences by sex account for less than 10 percent.