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Monopsonistic Discrimination, Worker Turnover, and the Gender Wage Gap

Author

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  • Barth, Erling

    (Institute for Social Research, Oslo)

  • Dale-Olsen, Harald

    (Institute for Social Research, Oslo)

Abstract

Motivated by models of worker flows, we argue in this paper that monopsonistic discrimination may be a substantial factor behind the overall gender wage gap. On matched employer-employee data from Norway, we estimate establishment-specific wage premiums separately for men and women, conditioning on fixed individual effects. Regressions of worker turnover on the wage premium identify less wage elastic labour supply facing each establishment of women than that of men. Workforce gender composition is strongly related to employers' wage policies. The results suggest that 70-90 percent of the gender wage gap for low-educated workers may be attributed to differences in labour market frictions between men and women, while the similar figures for high-educated workers ranges from 20 to 70 percent.

Suggested Citation

  • Barth, Erling & Dale-Olsen, Harald, 2009. "Monopsonistic Discrimination, Worker Turnover, and the Gender Wage Gap," IZA Discussion Papers 3930, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3930
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    More about this item

    Keywords

    monopsony; gender wage gap;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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