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The Gender Pay Gap Under Duopsony: Joan Robinson Meets Harold Hotelling

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  • Boris Hirsch

Abstract

This paper presents an alternative explanation of the gender pay gap resting on a simple Hotelling‐style duopsony model of the labour market. Since there are only two employers, equally productive women and men have to commute and face travel cost to do so. We assume that some women have higher travel cost, e.g., due to more domestic responsibilities. Employers exploit that women on average are less inclined to commute and offer lower wages to all women. Since women's firm‐level labour supply is for this reason less wage‐elastic, this model is in line with Robinson's explanation of wage discrimination.

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  • Boris Hirsch, 2009. "The Gender Pay Gap Under Duopsony: Joan Robinson Meets Harold Hotelling," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(5), pages 543-558, November.
    • Handle: RePEc:bla:scotjp:v:56:y:2009:i:5:p:543-558
    DOI: 10.1111/j.1467-9485.2009.00497.x
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    13. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2010. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 291-330, April.
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    15. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2008. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Working Papers 1111, Princeton University, Department of Economics, Industrial Relations Section..
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    2. Gravert, Jan Hendrik & Bredemeier, Christian & Jüßen, Falko, 2015. "Estimates of Labor-Supply Elasticities with Joint Borrowing Constraints of Couples," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113115, Verein für Socialpolitik / German Economic Association.
    3. Boris Hirsch & Marion König & Joachim Möller, 2013. "Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(4), pages 412-439, September.
    4. Goerke, Laszlo & Neugart, Michael, 2017. "Social comparisons in oligopsony," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 196-209.
    5. Aleksandra Majchrowska & Paweł Strawiński, 2016. "Regional Differences in Gender Wage Gaps in Poland: New Estimates Based on Harmonized Data for Wages," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(2), pages 115-141, June.
    6. Janssen, Simon & Tuor Sartore, Simone N. & Backes-Gellner, Uschi, 2014. "Social Attitudes on Gender Equality and Firms' Discriminatory Pay-Setting," IZA Discussion Papers 7959, Institute of Labor Economics (IZA).
    7. Collischon Matthias, 2019. "Is There a Glass Ceiling over Germany?," German Economic Review, De Gruyter, vol. 20(4), pages 329-359, December.
    8. Simon Janssen & Simone Tuor Sartore & Uschi Backes-Gellner, 2016. "Discriminatory Social Attitudes and Varying Gender Pay Gaps within Firms," ILR Review, Cornell University, ILR School, vol. 69(1), pages 253-279, January.
    9. Bredemeier, Christian, 2016. "Wage Gaps, Earnings Gaps, and the Market Power of Employers," VfS Annual Conference 2016 (Augsburg): Demographic Change 145935, Verein für Socialpolitik / German Economic Association.
    10. Laszlo Goerke & Michael Neugart, 2017. "Social comparisons in Oligopsony," IAAEG Discussion Papers until 2011 201704, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    11. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2010. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 291-330, April.
    12. Kajari Saha, 2021. "The China trade shock and the gender wage gap in India: A District-level analysis," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2021-012, Indira Gandhi Institute of Development Research, Mumbai, India.

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