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The Gender Gap in Career Trajectories: Do Firms Matter?

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Listed:
  • Card, David

    (University of California, Berkeley)

  • Devicienti, Francesco

    (University of Turin)

  • Rossi, Mariacristina

    (University of Turin)

  • Weber, Andrea

    (Central European University)

Abstract

The gender wage gap rises with experience. To what extent do firm policies mediate this rise? We use administrative data from Italy to identify workers' first jobs and compute wage growth over the next 5 years. We then decompose the contribution of first employers to the rise in the gender wage gap, taking account of maternity events affecting a third of female entrants. We find that idiosyncratic firm effects explain 20% of the variation in early career wage growth, and that the sorting of women to slower-growth firms accounts for a fifth of the gender growth gap. Women who have a child within 5 years of entering work have particularly slow wage growth, reflecting a maternity effect that is magnified by the excess sorting of mothers-to-be to slower-growth firms. Many entrants change jobs within their first 5 years and we find that the male-female difference in early career wage growth arises from gaps for both movers and stayers. The firm components in wage growth for stayers and movers are highly correlated, and contribute similar sorting penalties for women who stay or leave.

Suggested Citation

  • Card, David & Devicienti, Francesco & Rossi, Mariacristina & Weber, Andrea, 2025. "The Gender Gap in Career Trajectories: Do Firms Matter?," IZA Discussion Papers 17860, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17860
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    More about this item

    Keywords

    maternity; firm effects; gender gaps; matched employer-employee data;
    All these keywords.

    JEL classification:

    • J00 - Labor and Demographic Economics - - General - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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