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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 () (IAB, Nürnberg)
Möller, Joachim () (IAB, Nürnberg)
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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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
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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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Find related papers by JEL classification:
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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  3. 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. [Downloadable!] (restricted)
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  5. Hugo Ñopo, 2008. "Matching as a Tool to Decompose Wage Gaps," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 290-299, 03. [Downloadable!] (restricted)
    Other versions:
  6. Markus Frölich, 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. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
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  8. 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. [Downloadable!] (restricted)
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  9. Anne Busch & Elke Holst, 2008. ""Gender Pay Gap": in Großstädten geringer als auf dem Land," Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(33), pages 462-468. [Downloadable!]
  10. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-57, October. [Downloadable!] (restricted)
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  11. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
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  12. 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. [Downloadable!] (restricted)
  13. Helen Robinson, 2005. "Regional evidence on the effect of the national minimum wage on the gender pay gap," Regional Studies, Taylor and Francis Journals, vol. 39(7), pages 855-872, October. [Downloadable!] (restricted)
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  14. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier. [Downloadable!] (restricted)
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