Greedy jobs, labour market institutions, and the gender pay gap

Abstract

Previous research argues that occupational gender pay gaps arise from greedy jobs within occupations. Individuals employed in greedy jobs are not easily substitutable. They work long hours at unpredictable times of the day that engender compensating differentials resulting in an earnings to hours elasticity that often exceeds one. This paper shows that greedy jobs also exist in Australia, where labour market institutions differ substantially from the United States. It shows that occupational gender earnings gaps are highest in occupations where greedy jobs proliferate. Wage-setting institutions engender heterogenous effects on occupational gender earnings gaps. Relative to the United States, occupational gender earnings gaps are smaller in Australia, consistent with the expansive coverage of collective agreements which compress the earnings distribution. Within occupations, the use of collective agreements attenuates the size of occupational gender earnings gaps, while the use of individual agreements increases it. Not surprisingly, individuals employed in greedy occupations predominantly use individual agreements to negotiate pay.

Keywords: Gender wage gap

JEL Classification: J16, J31, J32