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Abstract

This study evaluates the possible reasons for the persistent rural-urban wage gap among women in the U.S. The paper uses two-step panel data estimations that can consider explanations including rural-urban differences in observed individual characteristics and work-related characteristics and at the same time control for both unobserved differences in amenities and productivities and for the potential effects of endogeneity and/or sample selection bias in hours worked. The paper finds that significant rural-urban female wage differential exist for many groups, indicating the functioning of rural and urban labor markets are different.

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