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Dynamic Monopsony and the Gender Pay Gap

In: Monopsonistic Labour Markets and the Gender Pay Gap

Author

Listed:
  • Boris Hirsch

    (Friedrich-Alexander-Universität Erlangen-Nürnberg)

Abstract

In the following, we shall turn away from pure theory. Instead, we will use the theory presented in Chapters 7 and 8 to assess whether the gender pay gap may be caused by (third-degree) Robinsonian wage discrimination as laid out in detail in Chapter 5. If firms are able to offer different wages to men and women, then – as should be clear from the discussion in Chapter 5 – differences in labour supply elasticities at the level of the firm give them the opportunity of increasing their profits by discriminating against women. Taking up the results from Chapter 7, the same holds for firms with monopsony power in a dynamic setting, where both the short- and the long-run elasticity of firm-level labour supply are crucial for firms’ wage-setting behaviour. Additionally, if discounting becomes negligible, only the long-run elasticity matters, so that gender differences in the long-run firm-level labour supply elasticity may be the source of Robinsonian discrimination.

Suggested Citation

  • Boris Hirsch, 2010. "Dynamic Monopsony and the Gender Pay Gap," Lecture Notes in Economics and Mathematical Systems, in: Monopsonistic Labour Markets and the Gender Pay Gap, chapter 0, pages 151-200, Springer.
    • Handle: RePEc:spr:lnechp:978-3-642-10409-1_9
    DOI: 10.1007/978-3-642-10409-1_9
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