Title

Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany

Author(s)

Boris Hirsch Boris Hirsch (University of Erlangen-Nurnberg)

Thorsten Schank Thorsten Schank (University of Erlangen-Nurnberg)

Claus Schnabel Claus Schnabel (University of Erlangen-Nurnberg and IZA)

Abstract

This paper investigates women's and men's labor supply to the firm within a structural approach based on a dynamic model of new monopsony. Using methods of survival analysis and a large linked employer-employee dataset for Germany, we find that labor supply elasticites are small (1.9-3.7) and the women's labor supply to the firm is less elastic than men's (which is the reverse of gender differences in labor supply usually found at the level of the market). Our results imply that about one third of the gender pay gap might be wage discrimination by profit-maximizing monopsonistic employers.

Creation Date

2008-12

Section URL ID

IRS

Paper Number

541

URL

https://dataspace.princeton.edu/bitstream/88435/dsp01gq67jr170/1/541.pdf

File Function

Jel

J42, J60, J71

Keyword(s)

labor supply, monopsony, gender, gender pay gap, discrimination, monopsony papers, Germany

Suppress

false

Series

1