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Social Attitudes on Gender Equality and Firms' Discriminatory Pay-Setting

  • Janssen, Simon


    (Institute for Employment Research (IAB), Nuremberg)

  • Tuor Sartore, Simone N.


    (University of Zurich)

  • Backes-Gellner, Uschi


    (University of Zurich)

We analyze the relationship between social attitudes on gender equality and firms' pay-setting behavior by combining information about regional votes relative to gender equality laws with a large data set of multi-branch firms and workers. The results show that multi-branch firms pay more discriminatory wages in branches located in regions with a higher social acceptance of gender inequality than in branches located in regions with a lower acceptance. The results are similar for different subsamples of workers, and we cannot find evidence that regional differences in social attitudes influence how firms assign women and men to jobs and occupations. The investigation of a subsample of performance pay workers for whom we are able to observe their time-based and performance pay component separately shows that social attitudes on gender equality only influence the time-based pay component but not the performance pay component of the same workers. Because regional-specific productivity differences should influence the workers' performance pay and time-based pay, unobserved gender-specific productivity differences are not likely to explain the regional variation in within firm gender pay gaps. The results support theories and previous evidence showing that social attitudes influence gender pay gaps in the long run.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7959.

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Length: 46 pages
Date of creation: Feb 2014
Date of revision:
Publication status: published as "Discriminatory Social Attitudes and Varying Gender Pay Gaps within Firms" in Industrial and Labor Relations Review 96(1)
Handle: RePEc:iza:izadps:dp7959
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