Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 734: Competition, Takeovers and Gender Discrimination

Fredrik Heyman (), Helena Svaleryd () and Jonas Vlachos ()
Additional contact information
Fredrik Heyman: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Helena Svaleryd: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Jonas Vlachos: Stockholm University, Postal: Department of Economics, SE-106 91 Stockholm, Sweden

Abstract: Theories of taste-based discrimination predict that competitive pressures will drive discriminatory behavior 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.

Keywords: Discrimination; Competition; Takeovers; Wages

JEL-codes: J20; J31; J70

40 pages, February 21, 2008

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