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Abstract The authors investigate wage differentials between German male and female graduates at labour market entrance at all percentiles of the wage distribution. The wage differentials are decomposed using the single‐index approach suggested by DiNardo, Fortin and Lemieux (1996) and Fortin and Lemieux (1998), and by endowment, price and returns‐to‐skill function effects. The results reveal higher starting salaries for men at all percentiles of the income distribution, with the pay gap varying in magnitude. The endowment and price effects are favourable for men throughout. The effect of the difference in the returns‐to‐skill function works in favour of female graduates.
Behr et al. (Mon,) studied this question.