This study analyzes the relationship between the segregation of women across establishments and the salaries paid to men and women. My aim is to separate the impact the proportion of women working within an establishment has upon individual wages. For this purpose hypotheses are formulated as to what drives this impact: sex-specific preferences, lower qualifications among women or discrimination against women. To investigate this issue empirically, I use matched employer-employee data from Germany. My results indicate that an increasing proportion of women in an establishment reduces wages for males and females in both western and eastern Germany. Furthermore the empirical analysis shows that by successively including worker and establishment characteristics, the number of females in an establishment has a severely detrimental effect upon the salaries paid to both sexes.
gender wage differentials female segregation across establishments matched employer-employee data