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The Effects of Rent-sharing On the Gender Wage Gap in the Israeli Manufacturing Sector

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  • Guy Navon
  • Ilan Tojerow

Abstract

The paper analyzes the impact of workplace characteristics on individual wages based on a unique cross-section matched employer-employee dataset for the Israeli private manufacturing sector; specifically, we examine the effects of the interaction between rent sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively related to firms' profits per-employee even when controlling for group effects in the residuals, individuals’ and firms' characteristics, industry wage differentials and endogeneity of profits. Wage-profit elasticity is found to be 14 percent and it is identical for both genders. With respect to the overall gender wage gap (on average women earn 28 percent less than men), the results show that within firms there is no gender discrimination and that 12 percentage points of the gap can be explained by the wage-profits profile and by the fact that women are more likely to be employed in less profitable firms than men.

Suggested Citation

  • Guy Navon & Ilan Tojerow, 2006. "The Effects of Rent-sharing On the Gender Wage Gap in the Israeli Manufacturing Sector," Bank of Israel Working Papers 2006.05, Bank of Israel.
  • Handle: RePEc:boi:wpaper:2006.05
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    References listed on IDEAS

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    Cited by:

    1. Tanya Suhoy & Yotam Sofer, 2019. "Getting to Work in Israel: Locality and Individual Effects," Bank of Israel Working Papers 2019.02, Bank of Israel.
    2. Navon, Guy, 2009. "Human Capital Spillovers in the Workplace: Labor Diversity and Productivity," MPRA Paper 17741, University Library of Munich, Germany.
    3. Nitzan Tzur-Ilan, 2018. "LTV Limits and Borrower Risk," Bank of Israel Working Papers 2018.12, Bank of Israel.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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