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Gender Wage Gap and FirmsíDynamic Monopsony: Voluntary versus Involuntary Separations

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  • Sanchez, Rafael
  • Finot, Javier
  • Villena, Mauricio G.

Abstract

We exploit a national administrative dataset to estimate labor supply elasticities at the firm level, distinguishing for the first time the source of separation (quits versus layoffs), which is crucial as only the former is consistent with employees responses to changes in wages. Our results suggest that labor supply elasticities increase by around 18% when all separations (i.e., without identifying its source) are used instead of voluntary separations (i.e., quits). Hence, it transpires that previous literature, which due to data constraints, did not identify the source of separations, presented results which were upward biased, thus overestimating labor market competitiveness. We also find that between firm differences in the gender-specific elasticities are more relevant than within firm di¤erences when voluntary separations are used, a result that should be considered by governments in the design of their gender gap policy agenda.

Suggested Citation

  • Sanchez, Rafael & Finot, Javier & Villena, Mauricio G., 2019. "Gender Wage Gap and FirmsíDynamic Monopsony: Voluntary versus Involuntary Separations," MPRA Paper 99147, University Library of Munich, Germany, revised 01 Dec 2019.
    • Handle: RePEc:pra:mprapa:99147
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    References listed on IDEAS

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    1. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    2. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2010. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 291-330, April.
    3. Douglas A. Webber, 2016. "Firm-Level Monopsony and the Gender Pay Gap," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 323-345, April.
    4. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, October.
    5. Michael R Ransom & Ronald L. Oaxaca, 2010. "New Market Power Models and Sex Differences in Pay," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 267-289, April.
    6. Brandon Vick, 2017. "Measuring links between labor monopsony and the gender pay gap in Brazil," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    7. World Bank, 2012. "World Development Report 2012 [Rapport sur le développement dans le monde 2012]," World Bank Publications - Books, The World Bank Group, number 4391.
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    Cited by:

    1. Sanchez, Rafael & Finot, Javier & Villena, Mauricio G., 2019. "Gender Wage Gap and Firm Market Power in Chile," MPRA Paper 99149, University Library of Munich, Germany, revised 01 Sep 2019.

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    More about this item

    Keywords

    Gender Pay Gap; Dynamic Monopsony; Elasticity of Labor Supply; Worker Mobility; Chile;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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