A new GLO Discussion Paper finds that large firms have smaller within-firm raw gender pay gaps and similar unexplained gender pay gaps when compared to smaller firms.
GLO Discussion Paper No. 1149, 2022
GLO Fellow Ezgi Kaya
Author Abstract: Motivated by the introduction of the UK Gender Pay Gap Reporting legislation to large firms, defined as over 250 employees, we use linked employee-employer panel data from the Annual Survey of Hours and Earnings to explore pre-legislation variation in the gender pay gap by firm size. In doing so, we integrate two prominent but distinct empirical regularities in the labour economics literature, namely the gender pay gap and firm-size wage premium. We find evidence of both a larger raw and unexplained gender pay gap among large relative to smaller firms in the UK private sector even after controlling for unobserved worker heterogeneity, consistent with the legislation being effectively targeted. However, this conclusion changes after accounting for unobserved firm level heterogeneity and focusing on within-firm gender pay gaps. Large firms have smaller within-firm raw gender pay gaps and similar unexplained gender pay gaps when compared to smaller firms. We find that this conclusion is not specific to the current firm size threshold of 250 employees but holds more generally, including at proposed extensions of the legislation to smaller firms.
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The gender pay gap in the USA: a matching study
Katie Meara, Francesco Pastore & Allan Webster
OPEN ACCESS: Journal of Population Economics 33 (2020): 271–305
Vol. 35, Issue 4, October 2022: Journal of Population Economics (JOPE): 15 articles
Just released: CiteScore of JOPE moves up from 3.9 (2020) to 6.5 (2021)! LINK
Similar, its Impact Factor is now 4.7 (2021) after 2.8 (2020)! LINK
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
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