DP6879 Competition, Takeovers and Gender Discrimination

Author(s): Fredrik Heyman, Helena Svaleryd, Jonas Vlachos
Publication Date: June 2008
Keyword(s): Competition, Discrimination, Takeovers, Wages
JEL(s): J2, J31, J7
Programme Areas: Labour Economics, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6879

Theories of taste-based discrimination predict that competitive pressures will drive discriminatory behaviour out of the market. Using detailed matched employer-employee data, we analyze how firm takeovers and product market competition are related to the gender composition of the firm’s workforce and the gender wage gap. Using a difference-in-difference framework and dealing with several endogeneity concerns, we find that the share of female employees increases as a result of an ownership change, in particular when product market competition is weak. Further, increased competition reduces the gender wage gap, especially among highly educated employees. While the estimated wage effect is quite small, the results support the main theoretical predictions.