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Firms, industries and the gender wage gap

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  • Buzaglo-Baris, Shira

Abstract

This paper analyzes the gender wage gap across various margins in the labor market: between industries, between firms within industries, and within firms, with a particular focus on parenthood — an event that significantly shapes the gender wage gap. Using comprehensive Employer-Employee administrative data from Israel, the study finds that industry sorting is the primary driver, explaining 22% of the overall gender wage gap, with an additional 4% attributable to women sorting into lower-paying firms within the same industry. Sorting intensifies following parenthood, as mothers are less likely to move to higher-paying firms, especially within the industry. In high-paying industries, mothers tend to accept positions in lower-paying firms while maintaining their relative industry position, whereas in low-paying industries, fathers advance faster up the industry ladder, reinforcing a motherhood penalty at the industry-level. These findings suggest that women’s initial sorting into industries has long-lasting consequences.

Suggested Citation

  • Buzaglo-Baris, Shira, 2025. "Firms, industries and the gender wage gap," Labour Economics, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:labeco:v:97:y:2025:i:c:s0927537125001411
    DOI: 10.1016/j.labeco.2025.102817
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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