Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany

Boris Hirsch, Thorsten Schank () and Claus Schnabel ()
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Boris Hirsch: University of Erlangen-Nurnberg

No 1111, Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: This paper investigates women's and men's labor supply to the firm within a structural approach based on a dynamic model of new monopsony. Using methods of survival analysis and a large linked employer-employee dataset for Germany, we find that labor supply elasticites are small (1.9-3.7) and the women's labor supply to the firm is less elastic than men's (which is the reverse of gender differences in labor supply usually found at the level of the market). Our results imply that about one third of the gender pay gap might be wage discrimination by profit-maximizing monopsonistic employers.

Keywords: labor supply; monopsony; gender; gender pay gap; discrimination; monopsony papers (search for similar items in EconPapers)
JEL-codes: J42 J60 J71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-lab
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:pri:indrel:1111

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