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Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap

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Author Info

  • Hirsch, Boris

    ()
    (University of Erlangen-Nuremberg)

  • König, Marion

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Möller, Joachim

    ()
    (Institute for Employment Research (IAB), Nuremberg)

Abstract

In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial oligopsony model, we show that more densely populated labour markets are more competitive and constrain employers' ability to discriminate against women. Utilising a large administrative data set for western Germany and a flexible semi-parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly ten percentage points remained surprisingly constant over the entire observation period of thirty years.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4231.

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Length: 30 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4231

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Related research

Keywords: gender pay gap; urban-rural differences; matching; monopsonistic discrimination;

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References

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  1. Phimister, Euan, 2005. "Urban effects on participation and wages: Are there gender differences?," Journal of Urban Economics, Elsevier, vol. 58(3), pages 513-536, November.
  2. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  3. Hugo Nopo, 2003. "Matching as a Tool to Decompose Wage Gaps," Middlebury College Working Paper Series 0406, Middlebury College, Department of Economics.
  4. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  5. Fitzenberger, Bernd & Osikominu, Aderonke & Völter, Robert, 2005. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," ZEW Discussion Papers 05-10, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Robinson, Helen, 2003. "Regional evidence on the effect of the National Minimum Wage on the gender pay gap," Royal Economic Society Annual Conference 2003 176, Royal Economic Society.
  7. Paulo R.A. Loureiro & Francisco Galrão Carneiro & Adolfo Sachsida, 2004. "Race and gender discrimination in the labor market: an urban and rural sector analysis for Brazil," Journal of Economic Studies, Emerald Group Publishing, vol. 31(2), pages 129-143, May.
  8. Dragana Djurdjevic & Sergiy Radyakin, 2007. "Decomposition of the Gender Wage Gap Using Matching: An Application for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(IV), pages 365-396, December.
  9. Bowlus, A.J., 1995. "A Search Interpretation of Male-Female Wage Differentials," UWO Department of Economics Working Papers 9504, University of Western Ontario, Department of Economics.
  10. Schlicht, Ekkehart, 1982. "A Robinsonian Approach to Discrimination," Munich Reprints in Economics 3351, University of Munich, Department of Economics.
  11. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521315647, October.
  12. Markus Fr�lich, 2007. "Propensity score matching without conditional independence assumption--with an application to the gender wage gap in the United Kingdom," Econometrics Journal, Royal Economic Society, vol. 10(2), pages 359-407, 07.
  13. Michael Bradfield, 1990. "Long-run Equilibrium under Pure Monopsony," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 700-704, August.
  14. Capozza, Dennis R & Van Order, Robert, 1978. "A Generalized Model of Spatial Competition," American Economic Review, American Economic Association, vol. 68(5), pages 896-908, December.
  15. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
  16. Anne Busch & Elke Holst, 2008. ""Gender Pay Gap": in Großstädten geringer als auf dem Land," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(33), pages 462-468.
  17. Joni Hersch & Leslie S. Stratton, 1997. "Housework, Fixed Effects, and Wages of Married Workers," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 285-307.
  18. Boris Hirsch, 2009. "The Gender Pay Gap Under Duopsony: Joan Robinson Meets Harold Hotelling," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(5), pages 543-558, November.
  19. Dan A. Black & Amelia M. Haviland & Seth G. Sanders & Lowell J. Taylor, 2008. "Gender Wage Disparities among the Highly Educated," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 630-659.
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Cited by:
  1. Julie L. Hotchkiss & Menbere Shiferaw, 2011. "Decomposing the education wage gap: everything but the kitchen sink," Review, Federal Reserve Bank of St. Louis, issue July, pages 243-272.
  2. Beblo, Miriam & Ohlert, Clemens & Wolf, Elke, 2011. "Logib-D und die Entgeltunterschiede zwischen Männern und Frauen in deutschen Betrieben : eine Abschätzung des politischen Handlungsfeldes (Logib-D and the gender pay gaps in German establishments : ," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 43-52.

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