Firms and the Gender Pay Gap: A Cross-National Comparison

This paper examines the sources of the sex wage gap in a set of EU countries with the European Structure of Earnings Survey (ESES), a unique cross-national survey of matched employeremployee data. The paper moves beyond traditional analysis of sex wage gap by incorporating the workplace effect in the wage outcomes of men and women and by developing inter-country comparisons via the Juhn-Murphy-Pierce decomposition. The obtained evidence confirms that the sex wage gap is explained in all the countries by the segregation of females into low-paying establishments and that the extent of femaleness is one characteristic of firms that lowers wages. In line with these results, the Oaxaca-Blinder decomposition results show that job and workplace characteristics are very relevant in explaining wage differences between males and females in all the countries. The use in the final part of the paper of the Juhn-Murphy-Pierce decomposition technique with a rich set of workplace characteristics provides interesting insights into the origin of the gender pay gap in the European countries. The results of the Juhn-Murphy-Pierce decomposition points that although gender-specific factors are important in explaining intercountry differences in the magnitude of the sex wage gap, differences in wage structure are in general a major source of inter-country differences in this gap.