Tallinn University of Technology

Seminar takes place on Wednesday, 27 May 2020 at 15:00-16:00 Via MS Teams (please join via link below).

Presenter: Jaan Masso (University of Tartu)

Recent research suggests that firm-level factors play a significant role in the gender wage gap. This paper adds to this literature by analysing the role of sorting between firms and bargaining within firms using the methodology of Card et al. (2016). We employ linked employer-employee data for the whole population of firms and employees from Estonia for 2006–2017. Estonia is a country with the highest gender wage gap in the EU with about two-thirds of that unexplained by conventional factors. The results show that firm-level factors are important determinants of the gender wage gap, explaining as much as 35% of the gap. We find that within-firm bargaining plays a larger role in the gender wage gap than similar prior papers. This could be related to lenient labour market institutions, as reflected in low minimum wages and union power, and to lower bargaining skills of women. Further, the role of firm-level factors in the gender wage gap have increased over time, and these are especially important at the top of the wage distribution and among workers that are more skilled. There is a heavy penalty for motherhood in wages, 4–9 log points, but this is not related to firm-specific time-invariant productivity premiums.
JEL Classification: J31, J71, J16, D22

Keywords: Gender wage gap, firm-level productivity premiums, sorting and bargaining, distribution of wages, skills, motherhood penalty

The seminars of the Department of Economics and Finance (DEF) usually take place on the second and fourth Wednesdays of the month. The seminars are public and thepurpose is to strengthen discussion and research cooperation. The presentation will last approximately 45 minutes followed by 15 minutes of discussion, in total one hour. The seminars will generally be held in English. Copies of the paper will be available at the seminar. The DEF seminar series is organised in collaboration with the project ”Institutions for Knowledge Intensive Development“, which has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 734712. Questions about the seminar can be sent to the seminar organizers, Prof Karsten Staehr or Rachatar Nilavongse.


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