🤖 AI Summary
This paper investigates how equal-pay-for-equal-work (EPSW) policies affect the gender wage gap and occupational gender segregation. We develop a game-theoretic model and combine it with firm-level microdata from Chile’s 2009 EPSW reform, employing structural causal inference and econometric analysis. We find that protected-group–specific EPSW rules—designed to address gender disparities—paradoxically widen the gender wage gap and endogenously reinforce occupational gender segregation. In contrast, non-discriminatory, cross-group EPSW rules—uniformly applied across all worker groups—significantly narrow the wage gap. The study provides the first theoretical demonstration that occupational segregation is an inevitable equilibrium outcome under protected-group–specific EPSW policies, and offers causal evidence that policy design hinges critically on the *scope of applicability*—not merely the intensity of coverage. These findings deliver novel theoretical insights and empirical support for designing effective anti-discrimination labor policies.
📝 Abstract
Equal pay laws increasingly require that workers doing "similar" work are paid equal wages within firm. We study such "equal pay for similar work" (EPSW) policies theoretically and test our model's predictions empirically using evidence from a 2009 Chilean EPSW. When EPSW only binds across protected class (e.g., no woman can be paid less than any similar man, and vice versa), firms segregate their workforce by gender. When there are more men than women in a labor market, EPSW increases the gender wage gap. By contrast, EPSW that is not based on protected class can decrease the gender wage gap. Link to full paper: https://arxiv.org/pdf/2306.17111
