Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap

Boris Hirsch · Marion König · Joachim Möller

59 citations0/0 files storedScottish Journal of Political Economy

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Labor market dynamics and wage inequality Labour Market and Migration Names, Identity, and Discrimination Research

Abstract

Abstract In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial model of monopsonistic competition, we show that more densely populated labour markets are more competitive and constrain employers’ ability to discriminate against women. Utilizing a large administrative data set for western Germany and a flexible semi‐parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly 10 percentage points remained surprisingly constant over the entire observation period of 30 years.

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References

1973Male-Female Wage Differentials in Urban Labor Markets 1974Schooling, Experience, and Earnings 1933The Economics of Welfare 1972The Economics of Discrimination.1979Monopolistic Competition with Outside Goods 1934The Economics of Imperfect Competition.1971The Economics of Discrimination 2000Gender Differences in Pay

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