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Gender differences in sorting on wages and risk

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  • Lavetti, Kurt
  • Schmutte, Ian M.

Abstract

We use Brazilian matched employer–employee data to provide new evidence on gender disparities in labor market sorting on wages and workplace safety. We show that women and men sort in highly disparate, but systematic, ways on the basis of physical risk, despite sorting almost identically on financial risk. To understand what factors might explain these gender differences in sorting, we begin by ruling out the possibility that men and women receive different compensating wage differentials for risk. We find that women do earn smaller establishment wage premia than men on average, but this difference is also unlikely to explain the sorting patterns. Despite having little direct effect on wages, sorting on safety may have large indirect effects on the wage gap through its outsized influence on the segregation of women and men across establishments. This segregation results in men earning substantially higher establishment wage premia, which explains 28% of the entire gender wage gap in Brazil.

Suggested Citation

  • Lavetti, Kurt & Schmutte, Ian M., 2023. "Gender differences in sorting on wages and risk," Journal of Econometrics, Elsevier, vol. 233(2), pages 507-523.
    • Handle: RePEc:eee:econom:v:233:y:2023:i:2:p:507-523
    DOI: 10.1016/j.jeconom.2022.06.012
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    Cited by:

    1. David Card & Jesse Rothstein & Moises Yi, 2023. "Industry Wage Differentials: A Firm-Based Approach," NBER Working Papers 31588, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Wage differentials; Gender; Occupational sorting;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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