The Gender Wage Gap: Evidence from Organisations in Northern Italy

Abstract The gender wage gap in Italy is persistent and, considering the low and selected female participation in the labour market, appears to be much higher than the unadjusted gender wage gap shown by Eurostat data. The data referring to the individual, using statistical sources that collect wages together with individual and family characteristics, allow the wage differential to be corrected for the non-random selection of women in the labour market. However, these data cannot delve deeper into the analysis of the determinants at the corporate level. With the intent to identify the determinants at the firm, or company, level, we conducted an analysis based on company micro-data from organisations located in Northern Italy that voluntarily underwent a gender equality analysis and certification. Our estimates are based on individual-level data, while incorporating select corporate-level variables to account for firm-specific characteristics related to cultural and organisational policies and practices. Econometric analyses confirm the presence of a gender wage gap in favour of men, together with the positive impact of age, seniority, and education on wages. Turning to the firm’s fixed effects: formalised policies on part-time work and time flexibility can help reduce the gender pay gap but when a high percentage of people work part-time, this can widen the pay gap. In addition, professional development policies in a firm play a significant role in narrowing the gap.