@TechReport{iza:izadps:dp13907, author={Li, Jiang and Dostie, Benoit and Simard-Duplain, Gaëlle}, title={What Is the Role of Firm-Specific Pay Policies on the Gender Earnings Gap in Canada?}, year={2020}, month={Nov}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={13907}, url={https://www.iza.org/index.php/publications/dp13907}, abstract={Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms' hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms' hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces.}, keywords={gender wage gap;firm effects;marital status;linked employer-employee data;pay-setting;sorting}, }