TY - JOUR

T1 - The levelling effect of product market competition on gender wage discrimination

AU - Hirsch, Boris

AU - Oberfichtner, Michael

AU - Schnabel, Claus

N1 - Funding Information: We would like to thank Christian Dustmann, Andrea Weber, Thomas Zwick, three anonymous referees, and the editor of this journal for very useful suggestions. We further appreciate the comments received at the 2014 annual meetings of the Ausschuss für Bevölkerungsökonomie im Verein für Socialpolitik, the European Society for Population Economics, and the European Association of Labour Economists as well as the 2014 BGPE workshop. Writing of this paper has been partially supported by a BGPE scholarship to Michael Oberfichtner. Responsible editor: Klaus F. Zimmermann 1University of Erlangen–Nuremberg, Chair of Labour and Regional Economics, Lange Gasse 20, 90403 Nuremberg, Germany, and IZA, Bonn, Germany. 2University of Erlangen–Nuremberg, Chair of Labour and Regional Economics, Lange Gasse 20, 90403 Nuremberg, Germany. Publisher Copyright: © 2014, Hirsch et al.; licensee Springer.

PY - 2014/12/1

Y1 - 2014/12/1

N2 - 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.

AB - 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.

KW - Economics

KW - Gender Pay gap

KW - Discrimination

KW - Product market competition

UR - http://www.scopus.com/inward/record.url?scp=84983304253&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/e7f3eb4e-dab5-37dd-8eaa-ae76fad5d200/

U2 - 10.1186/s40172-014-0013-1

DO - 10.1186/s40172-014-0013-1

M3 - Journal articles

VL - 3

SP - 1

EP - 14

JO - IZA Journal of Labor Economics

JF - IZA Journal of Labor Economics

SN - 2193-8997

IS - 1

M1 - 19

ER -