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The levelling effect of product market competition on gender wage discrimination

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  • Boris Hirsch
  • Michael Oberfichtner
  • Claus Schnabel

Abstract

Using linked employer–employee panel data for West Germany that include direct information on the competition faced by plants, we investigate the effect of product market competition on the gender pay gap. Controlling for match fixed effects, we find that intensified competition significantly lowers the unexplained gap in plants with neither collective agreements nor a works council. Conversely, there is no effect in plants with these types of worker codetermination, which are unlikely to have enough discretion to adjust wages in the short run. We also document a larger competition effect in plants with few females in their workforces. Our findings are in line with Beckerian taste-based employer wage discrimination that is limited by competitive forces. JEL codes: J16, J31, J71 Copyright Hirsch et al.; licensee Springer. 2014

Suggested Citation

  • Boris Hirsch & Michael Oberfichtner & Claus Schnabel, 2014. "The levelling effect of product market competition on gender wage discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-14, December.
    • Handle: RePEc:spr:izalbr:v:3:y:2014:i:1:p:1-14:10.1186/s40172-014-0013-1
    DOI: 10.1186/s40172-014-0013-1
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    Cited by:

    1. Valentine Fays & Benoît Mahy & François Rycx & Mélanie Volral, 2021. "Wage discrimination based on the country of birth: do tenure and product market competition matter?," Applied Economics, Taylor & Francis Journals, vol. 53(13), pages 1551-1571, March.
    2. Mario Bossler & Hans-Dieter Gerner, 2020. "Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata," ILR Review, Cornell University, ILR School, vol. 73(5), pages 1070-1094, October.
    3. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    4. Kuehnle, Daniel & Oberfichtner, Michael, 2017. "Does early child care attendance influence children's cognitive and non-cognitive skill development?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168241, Verein für Socialpolitik / German Economic Association.
    5. Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    6. Oberfichtner Michael & Schnabel Claus, 2019. "The German Model of Industrial Relations: (Where) Does It Still Exist?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 5-37, January.
    7. Berninger, Ina & Schröder, Tim, 2017. "Inklusion oder Schließung? Gewerkschaftlicher Organisationsgrad, berufliche Geschlechtersegregation und der Gender Pay Gap [Inclusion or closure? Unionisation, occupational segregation and the gend," Industrielle Beziehungen. Zeitschrift für Arbeit, Organisation und Management, Verlag Barbara Budrich, vol. 24(2), pages 174-195.
    8. Ohlert, Clemens & Beblo, Miriam & Wolf, Elke, 2016. "Competition, Collective Bargaining, and Immigrant Wage Gaps Within German Establishments," WiSo-HH Working Paper Series 35, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    9. Isabelle Sin & Steven Stillman & Richard Fabling, 2017. "What drives the gender wage gap? Examining the roles of sorting, productivity differences, and discrimination," Working Papers 17_15, Motu Economic and Public Policy Research.
    10. Pierre‐Richard Agénor & Kamer K. Ozdemir & Emmanuel Pinto Moreira, 2021. "Gender Gaps in the Labour Market and Economic Growth," Economica, London School of Economics and Political Science, vol. 88(350), pages 235-270, April.

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    More about this item

    Keywords

    Gender pay gap; Discrimination; Product market competition;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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