Firm-Level Monopsony and the Gender Pay Gap
AbstractUsing a dynamic labor supply model and linked employer-employee data, I find evidence of substantial search frictions, with females facing a higher level of frictions than males. However, the majority of the gender gap in labor supply elasticities is driven by across firm sorting rather than within firm differences, a feature predicted in the search theory literature, but which has not been previously documented. The gender differential in supply elasticities leads to 3.3% lower earnings for women. Roughly 60% of the elasticity differential can be explained by marriage and children penalties faced by women but not men.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7343.
Length: 32 pages
Date of creation: Apr 2013
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Find related papers by JEL classification:
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-27 (All new papers)
- NEP-BEC-2013-04-27 (Business Economics)
- NEP-DEM-2013-04-27 (Demographic Economics)
- NEP-DGE-2013-04-27 (Dynamic General Equilibrium)
- NEP-LAB-2013-04-27 (Labour Economics)
- NEP-LMA-2013-04-27 (Labor Markets - Supply, Demand, & Wages)
- NEP-LTV-2013-04-27 (Unemployment, Inequality & Poverty)
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