Are Women More Exposed to Firm Shocks?

Abstract

Workers care deeply about job and pay stability. Given potentially differing risk attitudes, we investigate whether firm wage and employment insurance enjoyed by workers differs by gender. We find that women are less protected than men against idiosyncratic shocks to their employers---a gender gap in firm insurance. The elasticity of women's wages with respect to variations in firm's performance is 95% higher than that of men, and the sensitivity of dismissal to firm shocks is 37% higher for female than for male employees. These gender differences are larger for employees with children, in small firms, and in firms without female executives.

Keywords: Insurance Within the Firm, Wage and Employment Stability, Labor and Finance, Shock Pass-Through

JEL Classification: G30, G52, J16, J28, J32