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The effects of equal pay laws on firm pay premiums: Evidence from Chile

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  • Cruz, Gabriel
  • Rau, Tomás

Abstract

This paper analyzes Chile’s 2009 Equal Pay for Equal Work Law (EPL) and its effects on firm pay premiums. The law affected firms with 10 or more workers and specified penalties by firm size, including a disclosure requirement for firms with 200 or more workers. We use matched employer-employee data to estimate worker-firm fixed-effects models, decomposing the firm’s contribution to the gender pay gap into bargaining power and sorting channels. The EPL reduces the firm premium gender gap by 6.1%, driven by the bargaining power channel. The effects are larger in firms exposed to higher penalties and disclosure requirements.

Suggested Citation

  • Cruz, Gabriel & Rau, Tomás, 2022. "The effects of equal pay laws on firm pay premiums: Evidence from Chile," Labour Economics, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:labeco:v:75:y:2022:i:c:s0927537122000288
    DOI: 10.1016/j.labeco.2022.102135
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    Cited by:

    1. Diego Gentile Passaro & Fuhito Kojima & Bobak Pakzad-Hurson, 2023. "Equal Pay for Similar Work," Papers 2306.17111, arXiv.org.
    2. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    3. Katariina Mueller-Gastell, 2023. "Poach or Promote? Job Sorting and Gender Earnings Inequality across U.S. Industries," Working Papers 23-23, Center for Economic Studies, U.S. Census Bureau.
    4. Brianna L. Alderman & Roger D. Blair & Perihan Ö. Saygin, 2023. "Monopsony, wage discrimination, and public policy," Economic Inquiry, Western Economic Association International, vol. 61(3), pages 572-583, July.
    5. MATSUMOTO Kodai & OKUMURA Yota & MORIMOTO Atsushi & YUGAMI Kazufumi, 2023. "The Effects of Financial Incentives on Small and Medium-sized Enterprises' Demand for Workers with Disabilities: Evidence from changes in Japan's employment quota system," Discussion papers 23019, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Gender pay gap; Firm pay premium; Equal pay laws;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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