Gender Differences in Sorting on Wages and Risk


Suggested Citation

Lavetti, Kurt and Ian M. Schmutte. "Gender Differences in Sorting on Wages and Risk." May 2020.

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We use Brazilian matched employer-employee data to provide new evidence on gender disparities in labor market sorting on wages and workplace safety. We show that women and men sort in highly disparate, but systematic, ways on the basis of physical risk, despite sorting almost identically on financial risk. To understand what factors might explain these gender differences in sorting, we begin by ruling out the possibility that men and women receive different compensating wage differentials for risk. We find that women do earn smaller establishment wage premia than men on average, but this difference is also unlikely to explain the sorting patterns. Despite having little direct effect on wages, sorting on safety has an outsized influence on the segregation of women and men across establishments. This segregation results in men earning substantially higher establishment wage premia, which explains nearly one-third of the entire gender wage gap in Brazil.