Gender Pay Differences in the European Union: Do Higher Wages Make Up For Discrimination?
AbstractThis paper explores the role of social interactions at the work floor for understanding gender pay differences in the EU. Using data from the Fourth European Working Conditions Survey, we find that sex similarity of subordinate and supervisor decreases the pay disadvantage for women in non-managerial occupations, though working for a female boss is associated with a lower wage than working for a man. This may point at a â€˜discrimination-for-payâ€™ effect. Female workers can avoid part of the discrimination against them by working for a woman and accepting lower pay. And when they face stronger discrimination in the situation of a male supervisor, they are â€˜bribedâ€™ by being offered a higher salary. Different results are obtained for managerial workers where sex similarity of worker and superior actually puts women at a further disadvantage. In addition to effects of vertical gender segregation, we examine whether wage formation is influenced by the proportion of women per sector (i.e., horizontal segregation), but find only weak support for the so-called social bias theory. Our main message is that while the traditional human capital model tends to study the wage formation process in isolation, gender pay differentials can also be seen as a social phenomenon, stemming from social interactions in labor markets.
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Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2009-041-ORG.
Date of creation: 01 Jul 2009
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European Union; wages; emancipation; gender pay differences;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-28 (All new papers)
- NEP-BEC-2009-07-28 (Business Economics)
- NEP-EEC-2009-07-28 (European Economics)
- NEP-LAB-2009-07-28 (Labour Economics)
- NEP-MIC-2009-07-28 (Microeconomics)
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- Furnham, Adrain & Wilson, Emma, 2011. "Gender differences in estimated salaries: A UK study," The Journal of Socio-Economics, Elsevier, vol. 40(5), pages 623-630.
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