The Effects of Rent-Sharing on the Gender Wage Gap in the Israeli Manufacturing Sector

27 Pages Posted: 23 Oct 2006

See all articles by Guy Navon

Guy Navon

Bank of Israel

Ilan Tojerow

Université Libre de Bruxelles (ULB) - Department of Applied Economics (DULBEA); IZA Institute of Labor Economics

Abstract

This paper analyzes the impact of workplace characteristics on individual wages based on a unique cross-section matched employer-employee dataset for the Israeli private manufacturing sector in 1995; especially, we examine the effects of the interaction between rent-sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively related to firms' profits-per-employee even when controlling for group effects in the residuals, individual and firms' characteristics, industry wage differentials and endogeneity of profits. Wage-profit elasticity is found to be 14 percent and it is insignificantly different between genders. With respect to the overall gender wage gap (on average women earn 28 percent less than men), the results show that within firms there is no gender discrimination and that 12 percent of this gap can be explained by the wage-profits profile and by the fact that women are more likely to be employed in less profitable firms than men.

Keywords: wages, profits, rent sharing, gender

JEL Classification: D31, J16, J31, J70

Suggested Citation

Navon, Guy and Tojerow, Ilan, The Effects of Rent-Sharing on the Gender Wage Gap in the Israeli Manufacturing Sector. IZA Discussion Paper No. 2361, Available at SSRN: https://ssrn.com/abstract=939491 or http://dx.doi.org/10.2139/ssrn.939491

Guy Navon

Bank of Israel ( email )

P.O. Box 780
Jerusalem, 91907
Israel

Ilan Tojerow (Contact Author)

Université Libre de Bruxelles (ULB) - Department of Applied Economics (DULBEA) ( email )

Ave. Franklin D Roosevelt, 50
Brussels, B-1050
Belgium

HOME PAGE: http://homepages.ulb.ac.be/~itojerow/

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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