Does education and skills mismatch affect gender wage gap? A decomposition analysis of PIAAC data for some European countries

This paper analyses gender wage gap in a selection of five European countries: France, Germany, Italy, Spain and United Kingdom. Using data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC), we investigate the determinants of gender wage disparities at different points of income distribution, focusing on the effects of job mismatches, i.e. mismatch in education and in skills. Firstly, estimates from a variant of human capital earnings function, named ORU (Over-education, Required-education, Under-education) model, confirm the effect of “classic” covariates of Mincerian equation but also highlight the relevant effect of educational and skills mismatch on the gender wage gap. Subsequently, the Oaxaca-Blinder and the Machado-Mata approach are applied to decompose and analyze the determinants of gender gap focusing on the effect of educational and skill mismatch.