Firm-level Evidence on Gender Wage Discrimination in the Belgian Private Economy

In this paper we explore a matched employer-employee data set to investigate the presence of gender wage discrimination in the Belgian private economy labour market. Contrary to many existing papers, we analyse gender wage discrimination using an independent productivity measure. Using firm-level data, we are able to compare direct estimates of a gender productivity differential with those of a gender wage differential. We take advantage of the panel structure to identify gender-related differences from within-firm variation. Moreover, inspired by recent developments in the production function estimation literature, we address the problem of endogeneity of the gender mix using a structural production function estimator alongside instrumental variable-general method of moments (IV-GMM) methods where lagged value of labour inputs are used as instruments. Our results suggest that there is no gender wage discrimination inside private firms located in Belgium, on the contrary.