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American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Equal Pay for Similar Work

  • Diego Gentile Passaro
  • Fuhito Kojima
  • Bobak Pakzad-Hurson
American Economic Review
vol. 116, no. 3, March 2026
(pp. 977–1013)
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Abstract

Equal pay laws increasingly require that workers with different group identities doing "similar" work are paid equal wages within firm. We study such "equal pay for similar work" (EPSW) policies theoretically and test our models' predictions empirically using evidence from a 2009 gender-based Chilean EPSW. Under EPSW, firms segregate their workforce by gender. When there are more men than women in a labor market, EPSW increases the gender wage gap.

Citation

Gentile Passaro, Diego, Fuhito Kojima, and Bobak Pakzad-Hurson. 2026. "Equal Pay for Similar Work." American Economic Review 116 (3): 977–1013. DOI: 10.1257/aer.20230832

Additional Materials

JEL Classification

  • J16 Economics of Gender; Non-labor Discrimination
  • J31 Wage Level and Structure; Wage Differentials
  • J38 Wages, Compensation, and Labor Costs: Public Policy
  • K31 Labor Law
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration