Abstract

Joint seminar LISER - University of Luxembourg

This paper investigates the role of firms in determining the gender gap in earnings on average

and at different quantiles of the earnings distribution. Using a linked employer-employee dataset

for Italy, we show that the gap in firm pay premia explains on average 30% of the gender pay

gap in the period 1995-2015. We decompose differences in premia into sorting of women into

low pay firms and lower bargaining power of women within firms. We find that sorting explains a

larger fraction of the gender pay gap than differences in bargaining on average and at the bottom

of the distribution, whereas the latter dominate at the top. Moreover, differences in bargaining

have increased in importance over time. We propose sorting as the outcome of gender differences

in mobility rates and provide evidence that women have a lower probability of moving towards

firms with higher premia. We find no evidence that an exogenous increase in female presence in

boards reduces differences in bargaining power between men and women.

Note: lunch is served at 12.00pm. Seminar starts at 12.30pm