The gender wage gap in the workplace: Does the age of the firm matter?

Abstract

We contribute to the literature on firm-level determinants of gender wage inequality by studying the link between a firm’s age and the size of its gender pay gap. Using European Structure of Earnings data for eight European countries, we find that in all these countries, the gender wage gaps are smallest in the youngest firms. Our results also show that in Central European countries, the size of the gender pay gap clearly increases with the age of the company; whereas in the older EU member states such link is not as apparent. Levels of gender wage inequality appear to be highest in companies that were previously state owned but were privatized during the transition. We interpret our findings with the support of competition and monopsony theories.