IDEAS home Printed from https://ideas.repec.org/p/zbw/faulre/94.html
   My bibliography  Save this paper

The levelling effect of product market competition on gender wage discrimination

Author

Listed:
  • Hirsch, Boris
  • Oberfichtner, Michael
  • Schnabel, Claus

Abstract

Using linked employer-employee panel data for West Germany that include direct information on the competition faced by plants, we investigate the effect of product market competition on the gender pay gap. Controlling for match fixed effects we find that intensified competition significantly lowers the unexplained gap in plants with neither collective agreements nor a works council. Conversely, there is no effect in plants with these types of worker codetermination, which are unlikely to have enough discretion to adjust wages in the short run. We also document a larger competition effect in plants with few females in their workforces. Our findings are in line with Beckerian taste-based employer wage discrimination that is limited by competitive forces.

Suggested Citation

  • Hirsch, Boris & Oberfichtner, Michael & Schnabel, Claus, 2014. "The levelling effect of product market competition on gender wage discrimination," Discussion Papers 94, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:94
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/100087/1/792431936.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Doris Weichselbaumer & Rudolf Winter-Ebmer, 2007. "The effects of competition and equal treatment laws on gender wage differentials [‘Models of job discrimination’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(50), pages 236-287.
    2. Audra J. Bowlus & Zvi Eckstein, 2002. "Discrimination and Skill Differences in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1309-1345, November.
    3. Andrea Weber & Christine Zulehner, 2014. "Competition And Gender Prejudice: Are Discriminatory Employers Doomed To Fail?," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 492-521, April.
    4. Boris Hirsch & Claus Schnabel, 2012. "Women Move Differently: Job Separations and Gender," Journal of Labor Research, Springer, vol. 33(4), pages 417-442, December.
    5. Sandra E. Black & Elizabeth Brainerd, 2004. "Importing Equality? The Impact of Globalization on Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 57(4), pages 540-559, July.
    6. repec:iab:iabfme:200502(en is not listed on IDEAS
    7. Doris Weichselbaumer & Rudolf Winter‐Ebmer, 2005. "A Meta‐Analysis of the International Gender Wage Gap," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 479-511, July.
    8. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
    9. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, December.
    10. repec:iab:iabfda:201302(en is not listed on IDEAS
    11. Heining, Jörg & Scholz, Theresa & Seth, Stefan, 2013. "Linked-Employer-Employee data from the IAB: LIAB cross-sectional model 2 1993-2010 (LIAB QM2 9310)," FDZ Datenreport. Documentation on Labour Market Data 201302_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    12. Juhn, Chinhui & Ujhelyi, Gergely & Villegas-Sanchez, Carolina, 2014. "Men, women, and machines: How trade impacts gender inequality," Journal of Development Economics, Elsevier, vol. 106(C), pages 179-193.
    13. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ-Methodenreport 200502 (en), Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Fredrik Heyman & Helena Svaleryd & Jonas Vlachos, 2013. "Competition, Takeovers, and Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 66(2), pages 409-432, April.
    15. Juhn, Chinhui & Ujhelyi, Gergely & Villegas-Sanchez, Carolina, 2014. "Men, women, and machines: How trade impacts gender inequality," Journal of Development Economics, Elsevier, vol. 106(C), pages 179-193.
    16. Sandra E. Black & Philip E. Strahan, 2001. "The Division of Spoils: Rent-Sharing and Discrimination in a Regulated Industry," American Economic Review, American Economic Association, vol. 91(4), pages 814-831, September.
    17. Martina Zweimüller & Rudolf Winter‐Ebmer & Doris Weichselbaumer, 2008. "Market Orientation and Gender Wage Gaps: an International Study," Kyklos, Wiley Blackwell, vol. 61(4), pages 615-635, November.
    18. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    20. Hirsch, Boris, 2013. "The impact of female managers on the gender pay gap: Evidence from linked employer–employee data for Germany," Economics Letters, Elsevier, vol. 119(3), pages 348-350.
    21. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-694, October.
    22. John T. Addison, 2009. "The Economics of Codetermination," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-10424-2, March.
    23. Kawaguchi, Daiji, 2007. "A market test for sex discrimination: Evidence from Japanese firm-level panel data," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 441-460, June.
    24. 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.
    25. Boris Hirsch & Michael Oberfichtner & Claus Schnabel, 2012. "Do women benefit from competitive markets? Product market competition and the gender pay gap in Germany," Economics Bulletin, AccessEcon, vol. 32(2), pages 1618-1624.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valentine Fays & Benoît Mahy & François Rycx & Mélanie Volral, 2021. "Wage discrimination based on the country of birth: do tenure and product market competition matter?," Applied Economics, Taylor & Francis Journals, vol. 53(13), pages 1551-1571, March.
    2. Mario Bossler & Hans-Dieter Gerner, 2020. "Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata," ILR Review, Cornell University, ILR School, vol. 73(5), pages 1070-1094, October.
    3. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    4. Kuehnle, Daniel & Oberfichtner, Michael, 2017. "Does early child care attendance influence children's cognitive and non-cognitive skill development?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168241, Verein für Socialpolitik / German Economic Association.
    5. Boris HirschBy & Daniel S. J. Lechmann & Claus Schnabel, 2017. "Coming to work while sick: an economic theory of presenteeism with an application to German data," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1010-1031.
    6. Oberfichtner Michael & Schnabel Claus, 2019. "The German Model of Industrial Relations: (Where) Does It Still Exist?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 5-37, January.
    7. Berninger, Ina & Schröder, Tim, 2017. "Inklusion oder Schließung? Gewerkschaftlicher Organisationsgrad, berufliche Geschlechtersegregation und der Gender Pay Gap [Inclusion or closure? Unionisation, occupational segregation and the gend," Industrielle Beziehungen. Zeitschrift für Arbeit, Organisation und Management, Verlag Barbara Budrich, vol. 24(2), pages 174-195.
    8. Ohlert, Clemens & Beblo, Miriam & Wolf, Elke, 2016. "Competition, Collective Bargaining, and Immigrant Wage Gaps Within German Establishments," WiSo-HH Working Paper Series 35, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    9. Isabelle Sin & Steven Stillman & Richard Fabling, 2017. "What drives the gender wage gap? Examining the roles of sorting, productivity differences, and discrimination," Working Papers 17_15, Motu Economic and Public Policy Research.
    10. Pierre‐Richard Agénor & Kamer K. Ozdemir & Emmanuel Pinto Moreira, 2021. "Gender Gaps in the Labour Market and Economic Growth," Economica, London School of Economics and Political Science, vol. 88(350), pages 235-270, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boris Hirsch & Steffen Mueller, 2014. "Firm leadership and the gender pay gap: do active owners discriminate more than hired managers?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(1), pages 129-142, March.
    2. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.
    3. Valentine Fays & Benoît Mahy & François Rycx & Mélanie Volral, 2021. "Wage discrimination based on the country of birth: do tenure and product market competition matter?," Applied Economics, Taylor & Francis Journals, vol. 53(13), pages 1551-1571, March.
    4. Cooke, Dudley & Fernandes, Ana P. & Ferreira, Priscila, 2019. "Product market competition and gender discrimination," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 496-522.
    5. Nikulin, Dagmara & Wolszczak-Derlacz, Joanna, 2022. "GVC involvement and the gender wage gap: Micro-evidence on European countries," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 268-282.
    6. Yahmed, Sarra Ben, 2017. "Gender wage discrimination and trade openness. Prejudiced employers in an open industry," ZEW Discussion Papers 17-047, ZEW - Leibniz Centre for European Economic Research.
    7. Fanfani, Bernardo, 2022. "Tastes for discrimination in monopsonistic labour markets," Labour Economics, Elsevier, vol. 75(C).
    8. Clémence Berson, 2016. "Local labor markets and taste-based discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
    9. Fredrik Heyman & Helena Svaleryd & Jonas Vlachos, 2013. "Competition, Takeovers, and Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 66(2), pages 409-432, April.
    10. Hirata, Guilherme & Soares, Rodrigo R., 2016. "Competition and the Racial Wage Gap: Testing Becker's Model of Employer Discrimination," IZA Discussion Papers 9764, Institute of Labor Economics (IZA).
    11. Iga Magda & Katarzyna Sałach, 2021. "Gender pay gaps in domestic and foreign-owned firms," Empirical Economics, Springer, vol. 61(4), pages 2237-2263, October.
    12. Hirata, Guilherme & Soares, Rodrigo R., 2020. "Competition and the racial wage gap: Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 146(C).
    13. Ederington, Josh & Sandford, Jeremy, 2016. "Employer discrimination and market structure: Does more concentration mean more discrimination?," International Journal of Industrial Organization, Elsevier, vol. 48(C), pages 1-33.
    14. Louise Johannesson & Hildegunn Kyvik Nordås, 2021. "Services Trade: The Great Gender Equaliser?," Foreign Trade Review, , vol. 56(3), pages 341-363, August.
    15. Johannesson, Louise & Kyvik Nordås, Hildegunn, 2020. "Gender and Labour Market Adjustment to Trade: The Case of India," Working Paper Series 1348, Research Institute of Industrial Economics.
    16. Chen, Yunsi & Hu, Dezhuang, 2023. "Why are exporters more gender-friendly? Evidence from China," Economic Modelling, Elsevier, vol. 118(C).
    17. Uwe JIRJAHN & Stephen C. SMITH, 2018. "Nonunion Employee Representation: Theory And The German Experience With Mandated Works Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 201-233, March.
    18. Gärtner, Debora & Grimm, Veronika & Lang, Julia & Stephan, Gesine, 2014. "Kollektive Lohnverhandlungen und der Gender Wage Gap : Befunde aus einer qualitativen Studie," IAB-Discussion Paper 201414, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Greaney, Theresa M. & Tanaka, Ayumu, 2021. "Foreign Ownership, Exporting and Gender Wage Gaps: Evidence from Japanese Linked Employer-Employee Data," Journal of the Japanese and International Economies, Elsevier, vol. 61(C).
    20. Oscar Molina Tejerina & Luis Castro Peñarrieta, 2020. "Unexplained Wage Gaps in the Tradable and Nontradable Sectors: Cross-Sectional Evidence by Gender in Bolivia," Investigación & Desarrollo, Universidad Privada Boliviana, vol. 20(1), pages 5-23.

    More about this item

    Keywords

    gender pay gap; discrimination; product market competition;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:faulre:94. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vierlde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.