This study examines the gender wage gap in Italy using the Stochastic Frontier Approach.

Using data from the European Union Statistics on Income and Living Conditions (EU-SILC) survey for Italy in 2021, we estimate a wage frontier model. We find evidence of a gender wage gap, with women earning significantly less than men even after controlling for observed characteristics. Our results are twofold. Specifically, we find that women have lower levels of wage efficiency, meaning that they are less able to convert their productivity into earnings. Second, we show that the size of the gender wage gap depends on a modelling choice regarding where to include in the model the dummy for gender.