The effects of competition and equal treatment laws on gender wage differentials

Abstract

"Discrimination, if it is inefficient, can be eliminated by competition. In most countries, it is also forbidden by law. This paper evaluates the influence of economic and legal factors on the portion of male-female wage differentials that is not explained by other worker characteristics and may be due to discrimination. We use a new international data set of suitable gender wage gap measures, constructed from the results of existing studies. Meta-analysis of the data shows that increased competition and adoption of international conventions concerning equal treatment laws both reduce gender wage gaps, while legislation that prevents women from performing strenuous or dangerous jobs tends to increase it." Copyright (c) CEPR, CES, MSH, 2007.

The Gender Pay Gap across Countries: A Human Capital Approach

“…Centralized bargaining tends to equalize these sectoral differences and, as such, we expect the gender pay gap to be negatively associated with this labor market institution. Economic competition is supposed to negatively affect the gender pay gap because firms would eliminate discrimination against women to minimize costs in a highly competitive market (Becker, 1957;Weichselbaumer and Winter-Ebmer, 2002). Public employment is another indicator of wage compression because public sectors are more inclined than private sectors to equalize wages for their employees (Kolberg 1991).…”

“…Previous comparative studies mostly focus on wage setting institutions (Blau and Kahn, 2003;Weichselbaumer and Winter-Ebmer, 2002). In particular, Weichselbaumer and Winter-Ebmer (2003) do a meta-analysis comparing 363 studies that collectively examine gender wage differences for 67 particular countries.…”

Identification, screening and stereotyping in labour market discrimination

“…Other economic models (e.g., of employee and customer discrimination, search costs, statistical discrimination, imperfect competition, self-fulfilling prophecies, gender differences in efficiency-wage effects, wage bargaining; see, e.g., Altonji and Blank 1999;Coate and Loury 1993;Haagsma 1993;Rosen 2003) are able to explain that discrimination can be persistent under strengthening competition in the product market, but none of them predicts that inefficient discrimination which is not based on differences in variance of the productivity distribution or reliability of individual information between groups may even increase under competitive pressure 3 (see Weichselbaumer and Winter-Ebmer 2007, for a recent overview of the empirical and theoretical literature). More importantly, (almost) all economic models seem to assume that the extents to which employers rely on stereotypic perceptions and prejudice are fixed and do not change endogenously.…”

Gender unemployment gaps in the EU: blame the family

“…Yet, gender differences in the labor market still persist, and their size varies considerably across countries (OECD 2002;. Research looking for an explanation of these cross-country differences has predominantly focused on gender wage gaps: see Altonji and Blank (1999) for a review and subsequent studies such as Blau and Kahn (2003), Weichselbaumer and Winter-Ebmer (2005), or Weichselbaumer and Winter-Ebmer (2007). There are papers that discuss gender employment gaps (Algan and Cahuc 2007;Bertola et al 2007); 1 however, only one study, Azmat et al (2006)hereinafter AGM, has tried to systematically account for the cross-country variation in gender differences in unemployment.…”