Gender Pay Gap, Labor Unions and Firm Performance
45 Pages Posted: 3 Feb 2020
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: Suggested Citation
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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