Expected Work Experience: A New Human Capital Measure
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This paper explains a proxy measure for work experience that uses readily available information on labor force participation rates by age and gender and supports greater understanding of the gender wage gap.
The data show that conventional proxies underestimate the contribution of gender differences in work experience in explaining the gender wage gap. Work experience is a key component of human capital, but data on actual work experience are rare. Potential experience, the most common proxy for actual experience, ignores labor market intermittency because of childbirth and child-rearing—a critical omission when analyzing the gender wage gap.