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An analysis of the gender layoff gap implied by a gender gap in wage bargaining

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  • Abrahams, Scott

Abstract

The assumption that wage bargaining power is greater for men than for women yields a novel, mechanical implication regarding the gender wage gap: there should also be a gender layoff gap. If women with the same marginal product of labor as men exercise less bargaining power and consequently earn lower wages, then female workers should on average be more profitable for a firm. When conditions reduce labor demand, the firm should therefore prefer to lay off its male workers first. I show that this is consistent with the data for the United States from 1982–2019. A calibration exercise based on the gender gap in layoff rates suggests that the female bargaining share has risen from 14% lower to 6% lower than the male share over time.

Suggested Citation

  • Abrahams, Scott, 2024. "An analysis of the gender layoff gap implied by a gender gap in wage bargaining," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523005311
    DOI: 10.1016/j.econlet.2023.111505
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