Journal
AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
Volume 11, Issue 2, Pages 74-113Publisher
AMER ECONOMIC ASSOC
DOI: 10.1257/app.20160664
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Funding
- German Research Foundation (DFG) through the Research Training Group 1659 [RTG-1659]
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Using linked employer-employee data for West Germany, I investigate the role of growing wage differentials between firms in the slowdown of gender wage convergence since the 1990s. The results show that two factors are at play: first, high-wage firms experience higher wage growth and employ disproportionately more men, and second, male firm premiums grow faster than female premiums in the same firms. These developments were catalyzed by a decline of union coverage, coupled with more firm-specific wage setting in collective bargaining agreements. Taken together, these conditions prevented the gender gap from narrowing by approximately 15 percent between the 1990s and 2000s. (JEL J16, J51, J31, J71)
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