Gender Pay Gap, Labor Unions and Firm Performance

45 Pages Posted: 3 Feb 2020

See all articles by Fabien-Antoine Dugardin

Fabien-Antoine Dugardin

Université Paris-Dauphine, PSL Research University

Edith Ginglinger

Université Paris-Dauphine, PSL Research University; European Corporate Governance Institute (ECGI)

Date Written: December 20, 2019

Abstract

Using detailed employee-employer administrative data, we analyze the impact of the gender pay gap on the performance of firms and find that it depends on the presence of labor unions. When the firm is not unionized, the gender pay gap reduces profitability. In contrast, when unions are present, the gender gap has no effect on profitability in male-dominated firms and increases profitability in female-dominated firms. Our evidence suggests that when there is no union, giving priority to cohesion and pay equality is value-enhancing. In highly feminized firms, unions provide employees with the option of nonpecuniary benefits, with females opting for better work-life balance and males opting for higher salaries. Our findings indicate that in these firms, the gender pay gap may reflect the divergent interests of female and male employees and can positively affect firm value.

Keywords: labor unions, gender pay gap, feminization, performance, profitability, productivity, wages

JEL Classification: G32, G34, G38, J16, J21, J24, J31, J71

Suggested Citation

Dugardin, Fabien-Antoine and Ginglinger, Edith, Gender Pay Gap, Labor Unions and Firm Performance (December 20, 2019). Université Paris-Dauphine Research Paper No. 3519647, Available at SSRN: https://ssrn.com/abstract=3519647 or http://dx.doi.org/10.2139/ssrn.3519647

Fabien-Antoine Dugardin (Contact Author)

Université Paris-Dauphine, PSL Research University ( email )

Place du Maréchal de Lattre de Tassigny
Paris, 75016
France

Edith Ginglinger

Université Paris-Dauphine, PSL Research University ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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