Non-base compensation and the gender pay gap

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This paper investigates whether non-base compensation contributes to the gender pay gap (GPG). Using administrative data from Germany, we find in wage decompositions that lower bonus payments to women explain about 10 per cent of the gap at the mean and at different quantiles of the unconditional wage distribution whereas the lower prevalence of shift premia and overtime pay among women is unimportant. Among managers, the contribution of bonuses to the mean gap more than doubles and is steadily rising as one moves up the wage distribution. Our findings suggest that gender differences in bonuses are an important contributor to the GPG, particularly in top jobs.
Original languageEnglish
JournalLabour - Review of labour economics and industrial relations
Issue number3
Pages (from-to)277-301
Number of pages25
Publication statusPublished - 01.09.2022

Bibliographical note

Funding Information:
The authors thank Luise Görges, Christian Pfeifer, Claus Schnabel, Thomas Zwick, two anonymous referees, and the editor for useful suggestions. The authors further appreciate comments by participants of the 13th IAAEU Workshop on Labour Economics in Trier and the GRAPE 2021 Gender Gaps Conference as well as by seminar participants in Lüneburg and Nuremberg. Open Access funding enabled and organized by Projekt DEAL.

Publisher Copyright:
© 2022 The Authors. LABOUR published by Fondazione Giacomo Brodolini and John Wiley & Sons Ltd.