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The effect of the spatial density of firms on gender wage gap

Author

Listed:
  • Andrés Castaño

    (Departamento de Economía, Universidad Católica del Norte, Chile)

  • Dusan Paredes

    (Departamento de Economía, Universidad Católica del Norte, Chile)

Abstract

In this paper, we investigate the effect of the spatial density of firms on gender wage gap. We formalize this relationship using a monopsonistic approach in which women face higher travel costs due to domestic responsibilities. This creates not only bargaining power at the firm level but wage discrimination as well. This bargaining power is reduced in dense areas as they typically present a greater number of job opportunities. Utilizing data at municipality level for Chile and a Propensity Score Matching estimator, we find that a higher number of firms in Chilean municipalities is associated with a reduction in the gender wage gap. Depending on the estimator used, the effect of a 10% increase in the number of firms in a municipality is associated with a decrease in the gender wage gap between 0.6 pp. and 0.9 pp.

Suggested Citation

  • Andrés Castaño & Dusan Paredes, 2015. "The effect of the spatial density of firms on gender wage gap," Documentos de Trabajo en Economia y Ciencia Regional 55, Universidad Catolica del Norte, Chile, Department of Economics, revised Feb 2015.
    • Handle: RePEc:cat:dtecon:dt201501
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    File URL: https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2015-01
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    Cited by:

    1. Aleksandra Majchrowska & Paweł Strawiński, 2016. "Regional Differences in Gender Wage Gaps in Poland: New Estimates Based on Harmonized Data for Wages," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(2), pages 115-141, June.

    More about this item

    Keywords

    Regional Labor Markets; Gender Pay Gap; Density of firms;
    All these keywords.

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