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Gender Differences in Labor Supply to Monopsonistic Firms: An Empirical Analysis Using Linked Employer-Employee Data from Germany

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Author Info
Boris Hirsch
Thorsten Schank
Claus Schnabel

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Abstract

This paper investigates women's and men's labor supply to the firm within a structural approach based on a dynamic model of new monopsony. Using methods of survival analysis and a linked employer-employee dataset for Germany, we find that labor supply elasticities are small (0.9 - 2.4) and that women's labor supply to the firm is substantially less elastic than men's (which is the reverse of gender differences in labor supply usually found at the level of the market). One implication of these findings is that the gender pay gap could be the result of wage discrimination by profit-maximizing monopsonistic employers.

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File URL: http://www.bgpe.de/texte/DP/006_hirsch.pdf
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File Function: First version, 2006
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Publisher Info
Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 006.

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Length: 26 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:bav:wpaper:006_hirsch

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Related research
Keywords: labor supply; monopsony; gender; discrimination;

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Find related papers by JEL classification:
J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Campbell, Carl M, III, 1993. "Do Firms Pay Efficiency Wages? Evidence with Data at the Firm Level," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 442-70, July. [Downloadable!] (restricted)
  2. Green, Francis & Machin, Stephen & Manning, Alan, 1996. "The Employer Size-Wage Effect: Can Dynamic Monopsony Provide an Explanation?," Oxford Economic Papers, Oxford University Press, vol. 48(3), pages 433-55, July. [Downloadable!] (restricted)
  3. Hirsch, Barry T. & Schumacher, Edward J., 2005. "Classic or new monopsony? Searching for evidence in nursing labor markets," Journal of Health Economics, Elsevier, vol. 24(5), pages 969-989, September. [Downloadable!] (restricted)
  4. Erling Barth & Harald Dale-Olsen, 1999. "Monopsonistic Discrimination and the Gender-Wage Gap," NBER Working Papers 7197, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March. [Downloadable!] (restricted)
  6. Arntz, Melanie, 2005. "The Geographical Mobility of Unemployed Workers : Evidence from West Germany," ZEW Discussion Papers 05-34, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  7. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  8. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x.
  9. Michael R. Ransom & Ronald L. Oaxaca, 2005. "Sex Differences in Pay in a "New Monopsony" Model of the Labor Market," IZA Discussion Papers 1870, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Audra J. Bowlus & Zvi Eckstein, 2002. "Discrimination and Skill Differences in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1309-1345, November. [Downloadable!] (restricted)
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  11. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. J. David Brown & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2008. "Undocumented worker employment and firm survivability," Working Paper 2008-28, Federal Reserve Bank of Atlanta. [Downloadable!]
  2. Ilan Tojerow, 2008. "Industry Wage Differential, Rent Sharing and Gender in Belgium," Working Papers DULBEA 08-20.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
    Other versions:
  3. Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2009. "Employer monopsony power in the labor market for undocumented workers," Working Paper 2009-14, Federal Reserve Bank of Atlanta. [Downloadable!]
  4. Michael R. Ransom & Ronald L. Oaxaca, 2008. "New Market Power Models and Sex Differences in Pay," Working Papers 1110, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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