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Firm-Level Monopsony and the Gender Pay Gap

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  • Webber, Douglas A.

    (Federal Reserve Board of Governors)

Abstract

Using a dynamic labor supply model and linked employer-employee data, I find evidence of substantial search frictions, with females facing a higher level of frictions than males. However, the majority of the gender gap in labor supply elasticities is driven by across firm sorting rather than within firm differences, a feature predicted in the search theory literature, but which has not been previously documented. The gender differential in supply elasticities leads to 3.3% lower earnings for women. Roughly 60% of the elasticity differential can be explained by marriage and children penalties faced by women but not men.

Suggested Citation

  • Webber, Douglas A., 2013. "Firm-Level Monopsony and the Gender Pay Gap," IZA Discussion Papers 7343, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7343
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    More about this item

    Keywords

    discrimination; monopsony;

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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