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Joan Robinson Meets Harold Hotelling : A Dyopsonistic Explanation of the Gender Pay Gap

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  • Hirsch, Boris

Abstract

This paper presents an alternative explanation of the gender pay gap resting on a simple Hotelling-style dyopsony model of the labor market. Since there are only two employers equally productive women and men have to commute and face travel cost to do so. We assume that a fraction of the women have higher travel cost, e.g., due to more domestic responsibilities. Employers exploit that women are less inclined to commute to their competitor and offer lower wages to women. Since women's labor supply at the firm level is for this reason less wage-elastic, this model presents an explanation of wage discrimination in line with Robinson (1933).

Suggested Citation

  • Hirsch, Boris, 2007. "Joan Robinson Meets Harold Hotelling : A Dyopsonistic Explanation of the Gender Pay Gap," Discussion Papers 51, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  • Handle: RePEc:zbw:faulre:51
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    References listed on IDEAS

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    1. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
    2. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, January.
    3. Andrews, Martyn J. & Gill, Len & Schank, Thorsten & Upward, Richard, 2006. "High wage workers and low wage firms : negative assortative matching or statistical artefact?," Discussion Papers 42, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    4. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2007. "Do Works Councils Inhibit Investment?," ILR Review, Cornell University, ILR School, vol. 60(2), pages 187-203, January.
    5. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2006. "Gender Differences in Labor Supply to Monopsonistic Firms : An Empirical Analysis Using Linked Employer-Employee Data from Germany," Discussion Papers 47, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    6. Brixy, Udo & Kohaut, Susanne & Schnabel, Claus, 2004. "How fast do newly founded firms mature? Empirical analyses on job quality in start-ups," Discussion Papers 30, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    7. Moritz, Michael & Gröger, Margit, 2006. "The German-Czech Border Region after the Fall of the Iron Curtain : Effects on the Labour Market," Discussion Papers 48, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    8. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
    9. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2010. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 291-330, April.
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    Cited by:

    1. Depew, Briggs & Sørensen, Todd A., 2013. "The elasticity of labor supply to the firm over the business cycle," Labour Economics, Elsevier, vol. 24(C), pages 196-204.
    2. Depew, Briggs & Sorensen, Todd A., 2011. "Elasticity of Supply to the Firm and the Business Cycle," IZA Discussion Papers 5928, Institute for the Study of Labor (IZA).
    3. Depew, Briggs & Norlander, Peter & Sorensen, Todd A., 2013. "Flight of the H-1B: Inter-Firm Mobility and Return Migration Patterns for Skilled Guest Workers," IZA Discussion Papers 7456, Institute for the Study of Labor (IZA).
    4. Anja Heinze & Elke Wolf, 2010. "The intra-firm gender wage gap: a new view on wage differentials based on linked employer–employee data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 851-879, June.

    More about this item

    Keywords

    monopsony; gender; discrimination;

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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