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The Effects of Rent-Sharing on the Gender Wage Gap in the Israeli Manufacturing Sector

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Author Info
Guy Navon () (Bank of Israel)
Ilan Tojerow () (Free University of Brussels (DULBEA) and IZA Bonn)

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Abstract

This paper analyzes the impact of workplace characteristics on individual wages based on a unique cross-section matched employer-employee dataset for the Israeli private manufacturing sector in 1995; especially, we examine the effects of the interaction between rent-sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively related to firms' profits-per-employee even when controlling for group effects in the residuals, individual and firms' characteristics, industry wage differentials and endogeneity of profits. Wage-profit elasticity is found to be 14 percent and it is insignificantly different between genders. With respect to the overall gender wage gap (on average women earn 28 percent less than men), the results show that within firms there is no gender discrimination and that 12 percent of this gap can be explained by the wage-profits profile and by the fact that women are more likely to be employed in less profitable firms than men.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2361.

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Length: 27 pages
Date of creation: Oct 2006
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Handle: RePEc:iza:izadps:dp2361

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Related research
Keywords: wages profits rent sharing gender

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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
J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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References listed on IDEAS
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    Other versions:
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