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Social Attitudes on Gender Equality and Firms' Discriminatory Pay-Setting

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  • Simon Janssen

    ()
    (Department of Business Administration (IBW), University of Zurich)

  • Simone N. Tuor Sartore

    ()
    (Department of Business Administration (IBW), University of Zurich)

  • Uschi Backes-Gellner

    ()
    (Department of Business Administration (IBW), University of Zurich)

Abstract

We analyze the relationship between social attitudes on gender equality and firms pay-setting behavior by combining information about regional votes relative to gender equality laws with a large data set of multi-branch firms and workers. The results show that multi-branch firms pay more discriminatory wages in branches located in regions with a higher social acceptance of gender inequality than in branches located in regions with a lower acceptance. The results remain robust if we account for detailed worker and job characteristics, and we cannot find evidence that regional differences in social attitudes influence how firms assign women and men to jobs and occupations. We investigate a subsample of performance pay workers for whom we are able to observe their time-based and performance pay component separately, and show that social attitudes on gender equality only influence the time-based pay component but not the performance pay component of the same workers. Because performance pay is more closely related to workers productivity than time-based pay, unobserved gender-specific productivity differences are not likely to explain the regional variation in within firm gender pay gaps.

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Bibliographic Info

Paper provided by University of Zurich, Department of Business Administration (IBW) in its series Working Papers with number 327.

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Length: 49 pages
Date of creation: Jul 2013
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Handle: RePEc:zrh:wpaper:327

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