American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Gender Pay Gap: Micro Sources and Macro Consequences
American Economic Review
(pp. 1765–1810)
Abstract
Using linked employer-employee data from Brazil, we document a significant gender pay gap, which is largely attributed to women working at lower-paying employers. To interpret this fact, we develop an equilibrium search model with endogenous firm pay, amenities, and hiring. We provide a constructive proof of identification of all model parameters. The estimated model suggests that amenities are important for both men and women, and that compensating differentials account for half of the gender pay gap. Equal treatment policies partly close gender gaps but are not output- or welfare-improving.Citation
Morchio, Iacopo, and Christian Moser. 2026. "The Gender Pay Gap: Micro Sources and Macro Consequences." American Economic Review 116 (5): 1765–1810. DOI: 10.1257/aer.20231107Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- J16 Economics of Gender; Non-labor Discrimination
- J23 Labor Demand
- J31 Wage Level and Structure; Wage Differentials
- J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- M51 Personnel Economics: Firm Employment Decisions; Promotions
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration