Firm Pay Policies and the Gender Earnings Gap: The Mediating Role of Marital and Family Status

Jiang Li, Benoit Dostie and Gaëlle Simard-Duplain

ILR Review, 2023, vol. 76, issue 1, 160-188

Abstract: Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, the authors examine the impact of firms’ hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), findings show that firm-specific premiums explain nearly one-quarter of the 26.8% average earnings gap between female and male workers. On average, firms’ hiring practices, due to differences in the relative proportion of women hired at high-wage firms (known as sorting), and pay-setting policies, due to differences in pay by gender within similar firms, each explain approximately one-half of this firm effect. The compositional difference between the two channels varies substantially over a worker’s life cycle, by parental and marital status, and across provinces.

Keywords: gender wage gap; firm effects; marital status; linked employer-employee data; pay-setting; sorting (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:76:y:2023:i:1:p:160-188

DOI: 10.1177/00197939221093562

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