Gender Wage Gap in Expectations and Realizations

Abstract

Realized wages are affected by investments and signals concerning productivity, which workers undertake on the basis of expectations on future job prospects. Thus, the gender wage gap is also likely to depend on workers' expectations. Using data on wage expectations of students and wage realizations of graduates from the same University (Bocconi, Italy), we show that the expected gender gap one year after graduation is consistent with the realized gap. There is instead a misperception later in the career because students expect the gap to be roughly constant while realizations indicate an increasing gap with experience. There is also evidence that the gender gap at the beginning of a career is particularly high in the most recent cohorts and lower in the previous ones. Finally, our results suggest that the careers of females are characterized by "glass ceilings" in particular at high skill levels, and by "sticky floors" at the opposite end of the skill spectrum.