Minimum wages and the gender wage gap within firms

Abstract

This paper studies how the introduction of a statutory minimum wage affects the gender wage gap within firms. I compare the residual gender wage gap in firms with and without minimum wage exposure before and after the reform using linked employer-employee data from Germany and employ a difference-in-differences approach in an event-study style with firm- and year-fixed effects. My results show that the introduction of the minimum wage led to a modest decline in the within-firm gender wage gap, with the clearest effects among incumbent workers and in the lower to middle part of the wage distribution. Effects differ across employment status, industries, and firm size. I find small wage changes in full-time jobs, a positive and significant post-reform effect for part-time workers, and no precise post-reform effects for marginal employment. These findings suggest that the effects of the minimum wage on the gender wage gap vary across worker groups and firm environments. A rich set of robustness checks, including alternative exposure thresholds and gender gap definitions, support my main findings.