A new parametric approach to gender gap with application to EUSILC data in Poland and Italy

Abstract Real income distribution comparisons are of interest to policy makers across European countries. Nowadays, a crucial component of income inequality remains the discrepancy between men and women, often called the gender gap. Since the gender gap is related to the whole distribution of incomes in a population, popular single metrics are not adequate, and previous studies applied the relative distribution method, a non‐parametric approach to the comparison of distributions. Here, we propose a parametric approach for estimating the relative distribution. Then we extend it to assess the impact of selected covariates—related to the personal characteristics of the samples—on the existing gender gap in both countries. In more detail, models for income were fitted to empirical data from Poland and Italy, from the European Survey of Income and Living Conditions (wave 2018). Afterwards, their parameters were employed to obtain the estimates of relative distribution characteristics. The methods applied in the study turned out to be relevant to describe the gender gap over the entire income range. Finally, the results of the empirical analysis are discussed to reveal similarities and substantial differences between the countries.