Is there a Gap within the Gap? A Municipal Analysis of the Gender Earnings Gap in Sweden.

Abstract: In the past century, Sweden has seen vast developments in narrowing the gender earnings gap between men and women. Nevertheless the gap still remains, and has revealed patterns of stagnation in the recent decade. In the presence of a gender earnings gap there is an unequal distribution of economic power between men and women, which may lead to an inefficient resource allocation. Today there is a lack of within-country studies tackling the gender earnings gap. Policies in Sweden today target the gender earnings gap on a national level although there are notable within-country differences to be found. An urban-rural comparison suggests that the gender earnings gap is generally larger in urban municipalities to rural municipalities; hence generating the question is there a gap within the gender earnings gap in Sweden? The thesis examines variables significantly relating to the gender earnings gap, taking into consideration that the gap is not uniform across Sweden. By examining the differing mechanisms of average earnings, human capital, gender-segregation and labour market absence between urban and rural municipalities in Sweden, the aim is to further contribute to the field of gender economics. Exploring the determinants on an urban-rural level is necessary to enable a more efficient policy-making process and confront the current stagnation. With macro-level data gathered from Statistics Sweden and the Swedish Social Insurance Agency for the years of 2003 to 2013, a series of Pooled Ordinary Least Squared regressions and Fixed Effects regressions are performed. Interaction variables are included in order to examine the difference in explanatory power of the gender earnings gap mechanisms in urban compared to rural municipalities. Results confirm a gender earnings gap in all 290 municipalities. Women’s to men’s earnings vary between 56 percent in urban municipalities to 87 percent in rural municipalities. The variables with the strongest impact on the gap are gender-segregation, labour market time and average earnings. Gender-segregation affects the gap more in rural municipalities and average earnings and human capital affect the gap most in urban municipalities, implying it is of relevance to go beyond country-borders in creating policies to narrow the gender earnings gap in Sweden.