WP released: Gender Gaps in the Urban Wage Premium

The paper “Gender Gaps in the Urban Wage Premium” is currently being circulated for comments.

Abstract:

In France, the gender wage gap for the 20% of the workforce living in the densest locations is 22% lower than that for those living in the bottom 20% of the density distribution, suggesting that women benefit more from urban density than men. In this paper Kenza Elass (Bocconi), Cecilia Garcia-Penalosa (AMSE), and Christian Schluter (AMSE) investigate the importance of geographical location for understanding the gender wage gap, using panelised administrative data for the universe of employees in France. Following the recent literature on economic geography that takes into account the endogeneity of location, we estimate the difference in the returns to urban density across genders. Our results show that earnings increase with density for both men and women, with a significantly higher urban wage premium for women, which is 53% larger than for men. We consider different mechanisms that may explain this pattern. Our data indicate that these factors explain most of the gender gap in earnings from living in denser areas. Differences in returns to experience and access to childcare facilities are important mechanisms, although half of the gender gap in returns to density is explained by the structure of the local labour market, notably the extent of occupational segregation which accounts for about a third of the gap.