Policies to reduce the gender pay gap feature prominently on the political agenda and interventions in the labor market are frequently proposed, claiming a persistent wage gap. We examine the change of the gender wage gap in Austria between 2002 and 2007 with new data from administrative records and find that it declined from 24% in 2002 to 19% in 2007. We observe that women's improved educational attainments were partly offset by a shift in the demand for skilled workers that disadvantaged unskilled labor. The main determinant of this decline is however the improvement of women's relative position in unobserved characteristics.
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