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The levelling effect of product market competition on gender wage discrimination

Author

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  • Boris Hirsch
  • Michael Oberfichtner
  • Claus Schnabel

Abstract

Using linked employer–employee panel data for West Germany that include direct information on the competition faced by plants, we investigate the effect of product market competition on the gender pay gap. Controlling for match fixed effects we find that intensified competition significantly lowers the unexplained gap in plants with neither collective agreements nor a works council. Conversely, there is no effect in plants with these types of worker codetermination, which are unlikely to have enough discretion to adjust wages in the short run. We also document a larger competition effect in plants with few females in their workforces. Our findings are in line with Beckerian taste-based employer wage discrimination that is limited by competitive forces.

Suggested Citation

  • Boris Hirsch & Michael Oberfichtner & Claus Schnabel, 2014. "The levelling effect of product market competition on gender wage discrimination," Working Papers 153, Bavarian Graduate Program in Economics (BGPE).
  • Handle: RePEc:bav:wpaper:153_hirschoberfichtnerschnabel
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    References listed on IDEAS

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    Cited by:

    1. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    2. Bossler, Mario & Gerner, Hans-Dieter, 2016. "Employment effects of the new German minimum wage: Evidence from establishment-level micro data," Annual Conference 2016 (Augsburg): Demographic Change 145926, Verein für Socialpolitik / German Economic Association.
    3. Sin, Isabelle & Stillman, Steven & Fabling, Richard, 2017. "What Drives the Gender Wage Gap? Examining the Roles of Sorting, Productivity Differences, and Discrimination," IZA Discussion Papers 10975, Institute for the Study of Labor (IZA).
    4. Bossler, Mario & Gerner, Hans-Dieter, 2016. "Employment effects of the new German minimum wage : evidence from establishment-level micro data," IAB Discussion Paper 201610, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    gender pay gap; discrimination; product market competition;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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