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Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap

  • Hirsch, Boris

    ()

    (University of Erlangen-Nuremberg)

  • König, Marion

    ()

    (Institute for Employment Research (IAB), Nuremberg)

  • Möller, Joachim

    ()

    (Institute for Employment Research (IAB), Nuremberg)

In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial oligopsony model, we show that more densely populated labour markets are more competitive and constrain employers' ability to discriminate against women. Utilising a large administrative data set for western Germany and a flexible semi-parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly ten percentage points remained surprisingly constant over the entire observation period of thirty years.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4231.

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Length: 30 pages
Date of creation: Jun 2009
Date of revision:
Publication status: published in: Scottish Journal of Political Economy, 2013, 60 (4), 412-439
Handle: RePEc:iza:izadps:dp4231
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  1. Anne Busch & Elke Holst, 2008. ""Gender Pay Gap": in Großstädten geringer als auf dem Land," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(33), pages 462-468.
  2. Phimister, Euan, 2004. "Urban Effects On Participation And Wages: Are There Gender Differences?," Discussion Papers 31789, University of Aberdeen Business School, Centre for European Labour Market Research (CELMR).
  3. Capozza, Dennis R & Van Order, Robert, 1978. "A Generalized Model of Spatial Competition," American Economic Review, American Economic Association, vol. 68(5), pages 896-908, December.
  4. Robinson, Helen, 2003. "Regional evidence on the effect of the National Minimum Wage on the gender pay gap," Royal Economic Society Annual Conference 2003 176, Royal Economic Society.
  5. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
  6. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
  7. Bowlus, A.J., 1995. "A Search Interpretation of Male-Female Wage Differentials," UWO Department of Economics Working Papers 9504, University of Western Ontario, Department of Economics.
  8. Boris Hirsch, 2009. "The Gender Pay Gap Under Duopsony: Joan Robinson Meets Harold Hotelling," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(5), pages 543-558, November.
  9. Djurdjevic, Dragana & Radyakin, Sergiy, 2005. "Decomposition of the Gender Wage Gap Using Matching: an Application for Switzerland," Darmstadt Discussion Papers in Economics 36794, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
  10. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  11. Nopo, Hugo, 2004. "Matching as a Tool to Decompose Wage Gaps," IZA Discussion Papers 981, Institute for the Study of Labor (IZA).
  12. Joni Hersch & Leslie S. Stratton, 1997. "Housework, Fixed Effects, and Wages of Married Workers," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 285-307.
  13. Markus Fr�lich, 2007. "Propensity score matching without conditional independence assumption--with an application to the gender wage gap in the United Kingdom," Econometrics Journal, Royal Economic Society, vol. 10(2), pages 359-407, 07.
  14. Paulo R.A. Loureiro & Francisco Galrão Carneiro & Adolfo Sachsida, 2004. "Race and gender discrimination in the labor market: an urban and rural sector analysis for Brazil," Journal of Economic Studies, Emerald Group Publishing, vol. 31(2), pages 129-143, May.
  15. Michael Bradfield, 1990. "Long-run Equilibrium under Pure Monopsony," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 700-704, August.
  16. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  17. Schlicht, Ekkehart, 1982. "A Robinsonian Approach to Discrimination," Munich Reprints in Economics 3351, University of Munich, Department of Economics.
  18. repec:cup:cbooks:9780521315647 is not listed on IDEAS
  19. Dan A. Black & Amelia M. Haviland & Seth G. Sanders & Lowell J. Taylor, 2008. "Gender Wage Disparities among the Highly Educated," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 630-659.
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