Worker-firm matching and the family pay gap: evidence from linked employer-employee data

The family pay gap is not fully explained by human capital depreciation and unobserved heterogeneity. Endogenous worker-firrm matching could also account for such wage differences. This hypothesis is tested thanks to linked employer-employee data on the French private sector between 1995 and 2011. Distinct hourly wage equations are estimated for women and for men, including firm- and worker- fixed effects on top of usual measures of human capital. Though omitted variable biases due to worker-firm matching explain none of the motherhood wage penalty, they play a role in the case of men who do not experience any wage loss after childbirth, but do not enjoy any premium either. In a counterfactual where women do not incur any penalty after childbirth, the gender gap still amounts to 2/3 of the one that currently prevails.