{"id":8614,"date":"2025-05-09T17:55:18","date_gmt":"2025-05-09T15:55:18","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=8614"},"modified":"2025-05-09T17:55:18","modified_gmt":"2025-05-09T15:55:18","slug":"when-business-isnt-womens-ally","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2025\/05\/09\/when-business-isnt-womens-ally\/","title":{"rendered":"When Business Isn\u2019t Women\u2019s Ally"},"content":{"rendered":"

Lower wages than men, often temporary contracts, concentration in more fragile companies: women\u2019s path through the labor market resembles an obstacle course. Company decisions\u2014especially regarding maternity\u2014significantly influence this journey and the effectiveness of public policies. Parental leave offers some improvement for working mothers, but its success largely depends on cultural context and social interactions.<\/em><\/p>\n

 <\/p>\n

Gender inequality in wages remains a central issue in global labor markets. Despite progress over recent decades (see the article by Jaime Arellano-Bover and co-authors in this issue), in OECD countries the median wage for women\u2014the middle value in the wage distribution, with half of the wages above and half below\u2014is still 11.4% lower than that of men. These differences widen when considering annual earnings instead of hourly wages, as women generally work fewer hours or weeks than men.<\/p>\n

Economists explain these outcomes as the result of a balance between labor supply by workers and labor demand by employers. Yet, in analyzing the causes of these inequalities and in searching for policies to reduce them, scholars and policymakers have focused much more on the choices made by workers than on the characteristics and decisions of the companies that employ them. As a result, gender inequality has often been interpreted through the lens of occupation type, sector concentration, work hours, overtime, or likelihood of exiting the labor market after childbirth\u2014implicitly assuming these are all individual decisions, with companies playing only a background role.<\/p>\n

Why Bring Businesses to the Forefront?<\/strong><\/h3>\n

Economic disparities between men and women are not solely due to individual worker choices\u2014they are also shaped by the wage policies and decisions made by employers.<\/p>\n

This observation may seem obvious, but rigorously identifying how much of the inequality is due to company decisions is anything but simple.<\/p>\n

Over recent decades, economists have increasingly focused on \u201cimperfect\u201d labor markets, where companies exert wage-setting power and can capture rents that are unequally distributed among workers based on characteristics like gender. In competitive markets, workers are assumed to be paid according to their marginal productivity. In imperfect markets, however, employers influence wage structures and career trajectories. Nobel laureate David Card and various co-authors have significantly expanded research into gender wage inequality by highlighting the role of firms. Traditionally, wage gaps were attributed to competitive market forces such as employer discrimination, differences in education or work experience, or varying preferences for flexibility. Today, greater attention is being paid to the non-competitive nature of labor markets and to how companies shape inequalities\u2014particularly through unequal access to high-paying employers and differing bargaining power between male and female workers within firms.<\/p>\n

Where You Work Matters<\/strong><\/h3>\n

The approach developed by Card and co-authors has become influential, and thanks to increasingly rich datasets linking worker and employer information, we now know that the wage benefits of working for certain companies contribute significantly to the gender wage gap. A study by Marco Palladino and colleagues shows that in the United States, company-specific wage premiums account for about two-thirds of the gender wage gap, while in Europe this share is lower\u201422% in Portugal (according to Card et al.), and about 34% in Italy, based on analysis with Salvatore Lattanzio. In all countries studied, most of this gap stems from women being concentrated in lower-paying firms that underpay all<\/em> their workers.<\/p>\n

This concentration becomes particularly pronounced after the birth of a child. Maternity has long been recognized as a major contributor to gender inequality in the labor market (see the article by Maria De Paola and Paola Biasi in this issue). Part of this inequality is tied to a higher likelihood that mothers, compared to similar women who have not (yet) had children, will end up working for lower-quality firms\u2014those with lower added value, revenue per employee, and capital per worker. And this isn\u2019t just right after childbirth\u2014it persists even 15 years later. But there\u2019s more.<\/p>\n

Motherhood and Firms<\/strong><\/h3>\n

How do companies respond to motherhood? If they observe that mothers resign more often than other workers, they may prefer to hire men, older women, or offer less advantageous contracts to younger women due to higher anticipated costs.<\/p>\n

In a study with Francesca Carta, Marta De Philippis, and Salvatore Lattanzio, we analyzed how women\u2019s resignations after childbirth influence employer behavior\u2014particularly affecting young women\u2019s job prospects. We relied on an Italian regulation that grants unemployment benefits to mothers within the first year of their child\u2019s life, even in cases of voluntary resignation. In 2015, the introduction of the New Social Insurance for Employment (Naspi) extended the duration of unemployment benefits, potentially encouraging more resignations by mothers. This policy shift allowed us to compare firms that employed mothers with a strong increase in post-birth resignation rates (following Naspi) to those that did not show such a response.<\/p>\n

In the former, we observe an increase in net female hiring (hires minus separations), especially among young women\u2014yet these women are more likely to be hired on temporary contracts, reflecting a deterioration in job quality. Lower-quality contracts for women, particularly those of childbearing age, support the idea of statistical discrimination\u2014that is, attributing the potential cost of motherhood to all<\/em> women, not just mothers. While unemployment benefits for mothers are intended to protect their income around childbirth, they also unintentionally reduce the quality of their employment prospects. Companies can thus shape the effectiveness of public policies aimed at supporting family income in the presence of children\u2014as shown in this case. Ignoring this company role means misjudging the policies\u2019 effects.<\/p>\n

Companies also mediate the impact of parenting support policies, such as parental leave. They act as microcosms where coworkers observe and emulate each other\u2019s parenting decisions.<\/p>\n

The Peer Effect<\/strong><\/h3>\n

Many countries have introduced policies to increase paternal involvement in childcare through paternity and parental leave programs. However, the success of such policies largely depends on the cultural context in which they are implemented, as well as on social interactions\u2014within families, among friends, and in workplaces. For example, a father might decide to take parental leave if he sees that a colleague has done so.<\/p>\n

In a study with Edoardo Di Porto, Joanna Kopinska, and Salvatore Lattanzio, we examined a reform that increased the generosity of parental leave for parents of children aged 3 to 5. We wanted to understand how a father\u2019s decision to take leave influences his colleagues who will become fathers in the future.<\/p>\n

Using administrative data from INPS (Italy\u2019s social security agency), we reconstructed individual work histories and mapped coworker networks within companies. Our analysis shows that when the proportion of fathers taking leave increases\u2014thanks to the reform\u2019s more generous provisions\u2014leave adoption also rises among future fathers within the same firm, amplifying the initial impact. This peer effect is even stronger when focusing specifically on fathers influencing other fathers, rather than mothers influencing fathers. Fathers may learn about leave options from colleagues or understand from their experiences whether taking leave affects career prospects. As it turns out, it doesn\u2019t\u2014fathers who take parental leave do not suffer negative career consequences. In fact, they tend to follow similar or even better career paths compared to those who do not take leave.<\/p>\n

The ripple effects of increased leave uptake don\u2019t stop inside companies. They extend to the partners of those coworkers. For these women, we observe increases in annual earnings, a higher likelihood of receiving permanent contracts, and access to better jobs. These findings are in line with existing studies\u2014and common intuition or personal experience\u2014showing that increased paternal involvement in childcare reduces gender specialization within households (as illustrated in this month\u2019s chart) and improves mothers\u2019 labor market prospects, resulting in higher household income.<\/p>\n

 <\/p>\n

Alessandra Casarico is a professor of public finance at Bocconi University and scientific director of the Social Inclusion Lab. She is also managing editor of lavoce.info.<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Lower wages than men, often temporary contracts, concentration in more fragile companies: women\u2019s path through the labor market resembles an obstacle course. 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