Testing for Statistical Discrimination based on Gender

This paper develops a model which incorporates the two most commonly cited strands of the literature on statistical discrimination, namely screening discrimination and stereotyping. The model is used to provide empirical evidence of statistical discrimination based on gender in the labour market. It is shown that the implications of both screening discrimination and stereotyping are consistent with observable wage dynamics. In addition, it is found that the gender wage gap decreases in tenure but increases in job transitions and that the fraction of women in high-ranking positions within a firm does not affect the level of statistical discrimination by gender.