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Competition and the Gender Wage Gap: New Evidence from Linked Employer-Employee Data in Hungary 1986-2003

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Author Info
Anna Lovasz () (Labor Project, Central European University)
Abstract

The overall gender wage gap fell from .31 to .15 between 1986 and 2003 following the transition to a free market in Hungary. During the same time period, firms faced increased competition from both new domestic and foreign firms due to the rapid liberalization measures implemented by the government. Becker's (1957) model of employer taste discrimination implies that employers that discriminate against women may be forced out of the market by competition in the long run, leading to a fall in the gender wage gap. I test this implication using data from the Hungarian Wage and Earnings Survey covering 1986-2003. I estimate the effect of variation in various measures of product market competition, including trade variables, on the within-firm endowment-adjusted gender wage gap, making use of the fact that I am able to follow firms over time. The estimates show a significant negative relationship between product market competition and the within-firm gender wage gap.

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Publisher Info
Paper provided by Institute of Economics, Hungarian Academy of Sciences in its series Budapest Working Papers on the Labour Market with number 0804.

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Length: 31 pages
Date of creation: Jun 2008
Date of revision:
Handle: RePEc:has:bworkp:0804

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Related research
Keywords: Transitional labor market; wage differentials; gender discrimination;

Other versions of this item:

Find related papers by JEL classification:
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
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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    Other versions:
  3. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May. [Downloadable!] (restricted)
  4. Sandra E. Black & Philip E. Strahan, 2001. "The Division of Spoils: Rent-Sharing and Discrimination in a Regulated Industry," American Economic Review, American Economic Association, vol. 91(4), pages 814-831, September. [Downloadable!] (restricted)
  5. Barry Reilly & Puja Vasudeva Dutta, 2005. "The Gender Pay Gap and Trade Liberalisation: Evidence for India," PRUS Working Papers 32, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  6. Newell, Andrew & Reilly, Barry, 2001. "The gender pay gap in the transition from communism: some empirical evidence," Economic Systems, Elsevier, vol. 25(4), pages 287-304, December. [Downloadable!] (restricted)
    Other versions:
  7. Ashenfelter, Orley & Hannan, Timothy, 1986. "Sex Discrimination and Product Market Competition: The Case of the Banking Industry," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 149-73, February. [Downloadable!] (restricted)
  8. Elizabeth Brainerd, 2000. "Women in transition: Changes in gender wage differentials in Eastern Europe and the former Soviet Union," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 54(1), pages 138-162, October.
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  10. Xin Meng & Dominique Meurs, 2004. "The gender earnings gap: effects of institutions and firms--a comparative study of French and Australian private firms," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 189-208, April. [Downloadable!] (restricted)
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  12. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-46, August. [Downloadable!] (restricted)
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  13. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies. [Downloadable!]
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  14. J.A. Bikker & K. Haaf, 2000. "Measures of competition and concentration in the banking industry: a review of the literature," Research Series Supervision (discontinued) 27, Netherlands Central Bank, Directorate Supervision. [Downloadable!]
  15. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March. [Downloadable!] (restricted)
  16. Stepan Jurajda, 2001. "Gender Wage Gap and Segregation in Late Transition," CERGE-EI Working Papers wp182, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
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  17. Sandra E. Black & Elizabeth Brainerd, 1999. "Importing equality? The effects of increased competition on the gender wage gap," Staff Reports 74, Federal Reserve Bank of New York. [Downloadable!]
  18. Berik, Gunseli & Van der Meulen Rodgers, Yana & Zveglich, Joseph E., 2003. "International trade and wage discrimination : evidence from East Asia," Policy Research Working Paper Series 3111, The World Bank. [Downloadable!]
  19. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier. [Downloadable!] (restricted)
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