Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap

Research, Conference object, Preprint OPEN
Hirsch, Boris ; König, Marion ; Möller, Joachim (2009)
  • Publisher: Friedrich-Alexander-Universität Erlangen-Nürnberg Erlangen und Nürnberg
  • Subject: Ländlicher Raum | Deutschland | J71 | J42 | J16 | matching | monopsonistic discrimination | Regionale Lohnstruktur | Gender pay gap | Stadt | gender pay gap, urban-rural differences, matching, monopsonistic discrimination | urban-rural differences | Lohndifferenzierung
    • jel: jel:J71 | jel:J42 | jel:J16
      ddc: ddc:330

In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial oligopsony model, we show that more densely populated labour markets are more competitive and constrain employers' ability to discriminate against women. Utilising a large administrative data set for western Germany and a flexible semi-parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly ten percentage points remained surprisingly constant over the entire observation period of thirty years.
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