The Gender Pay Gap: Micro Sources and Macro Consequences

105 Pages Posted: 23 May 2018 Last revised: 3 Aug 2020

See all articles by Iacopo Morchio

Iacopo Morchio

University of Bristol - Department of Economics

Christian Moser

Columbia University; Federal Reserve Bank of Minneapolis

Date Written: July 31, 2020

Abstract

We document that a large share of the gender pay gap in Brazil is due to women working at lower-paying employers. At the same time, women's revealed-preference ranking of employers is less increasing in pay compared to that of men. To interpret these facts, we develop an empirical equilibrium search model with endogenous gender differences in pay, amenities, and recruiting intensities across employers. The estimated model suggests that compensating differentials explain one-fifth of the gender pay gap, that there are significant output and welfare gains from eliminating gender differences, and that equal-treatment policies fail to close the gender pay gap.

Keywords: Empirical Equilibrium Search Model, Linked Employer-Employee Data, Worker and Firm Heterogeneity, Misallocation, Compensating Differentials, Discrimination

JEL Classification: E24, E25, J16, J31

Suggested Citation

Morchio, Iacopo and Moser, Christian, The Gender Pay Gap: Micro Sources and Macro Consequences (July 31, 2020). Available at SSRN: https://ssrn.com/abstract=3176868 or http://dx.doi.org/10.2139/ssrn.3176868

Iacopo Morchio

University of Bristol - Department of Economics ( email )

8 Woodland Road
Bristol BS8 ITN
United Kingdom

Christian Moser (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States
6093564653 (Phone)

HOME PAGE: http://www.economoser.com

Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

HOME PAGE: http://www.economoser.com/

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