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Non‐base compensation and the gender pay gap

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  • Boris Hirsch
  • Philipp Lentge

Abstract

This paper investigates whether non‐base compensation contributes to the gender pay gap (GPG). Using administrative data from Germany, we find in wage decompositions that lower bonus payments to women explain about 10 per cent of the gap at the mean and at different quantiles of the unconditional wage distribution whereas the lower prevalence of shift premia and overtime pay among women is unimportant. Among managers, the contribution of bonuses to the mean gap more than doubles and is steadily rising as one moves up the wage distribution. Our findings suggest that gender differences in bonuses are an important contributor to the GPG, particularly in top jobs.

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  • Boris Hirsch & Philipp Lentge, 2022. "Non‐base compensation and the gender pay gap," LABOUR, CEIS, vol. 36(3), pages 277-301, September.
    • Handle: RePEc:bla:labour:v:36:y:2022:i:3:p:277-301
    DOI: 10.1111/labr.12229
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    1. Jones, Melanie & Kaya, Ezgi, 2022. "Performance-related Pay and the UK Gender Pay Gap," GLO Discussion Paper Series 1211, Global Labor Organization (GLO).

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