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Vick Publishes Study on Labor Monopsony and Gender Wage Gap in Brazil

Posted on 5/3/2017 9:58:25 AM

Brandon Vick, assistant professor of Economics, recently published an article titled “Measuring Links Between Labor Monopsony and the Gender Pay Gap in Brazil” in the IZA Journal of Development and Migration.

This paper focuses on gender differences in job mobility and earnings for workers in Brazil. Monopsony theory suggests a link between the wage elasticity of labor supply and wage penalties. Elasticity is a measure of one’s responsiveness to wage changes (i.e., a pay cut). Should one group of workers be less elastic, that group is predicted to earn less than others because they stay with lower-paying jobs. 

“To measure wage elasticity, I estimate a hazard model on voluntary job separations using the RAIS, a linked employer-employee dataset that captures formal sector workers’ job durations over time. Four models are specified and point to significant gender differences. Across the models, male elasticity ranges from 1.638 to 2.175 while female elasticity is lower, ranging from 1.22 to 1.502. The female wage penalty predicted by these elasticity differences range from 11.4% to 20.5%, compared to an actual gender wage difference of 16.4%. Results of higher male elasticity are robust to the use of a more parsimonious specification, a discrete-time approach, the use of job spell data for a single year, and disaggregation by region. I extend the model through decomposition methods to help clarify the association between earnings, job separations, and elasticity.”

Vick is serving as a MARTI research associate through his membership to the interdisciplinary Veterans’ Reintegration Program and is affiliated faculty with the Women’s and Gender Studies Program. He has also investigated the current wage gap facing veterans and the gender wage gap in Appalachia.

Department of Economics