Gender Pay Gap Patterns in Domestic and Foreign-Owned Firms

We investigate differences in gender wage gaps between foreign-owned and domestically-owned firms in Poland, a country that has experienced large FDI inflows over the past three decades. We show that according to standard estimates of adjusted gender wage gaps, these differences are much larger in the foreign-owned companies than in the domestic firms. However, we also find that these estimates cannot be trusted because the domestically-owned firms have considerably higher levels of gender segregation. Using a non parametric matching and decomposition technique (Nopo 2008) we find that gender wage gaps in domestically-owned firms are only slightly smaller than those in foreign-owned companies. Women tend to segregate into low-paid jobs in the domestic sector, whereas foreign-owned companies have much larger within-firm differences in earnings. In sum, we find that the nature of gender wage gaps and the factors that underlie them differ between domestic and foreign-owned companies.