The gender earnings gap: Effects of institutions and firms - A comparative study of French and Australian private firms

This paper uses two employer-employee linked data sets to investigate the interactive role of labour market institutions and firm wage policies on the gender earnings gap. Extending the Juhn et al. (1991) decomposition methodology, a new decomposition methodology is proposed to investigate the role of firm wage policies on the gender earnings gap. Two countries with different wage bargaining systems, Australia and France, are used to conduct a comparative study. It is found that firm wage policies in Australia play a much larger role in narrowing the gender earnings gaps than in France. This is mainly due to the fact that Australia has a more decentralised wage bargaining system and that such system is operated under an environment where there is a strong union presence.