This paper investigates discrimination against women within the Brazilian labour market using firm-level data from the World Bank Investment Climate Survey. The purpose of this paper is to determine whether the female employees in the Brazilian labour market are paid less than their productivity warrants due to the existence of discrimination.
Based on employer discrimination model proposed by Becker (1971) that considered the proportion of female employees as a proxy for the extent of discrimination, the authors estimate the profit function using OLS analysis, and regress it on the proportion of female employees and other firm characteristics. To address the endogeneity problem caused by unobservable productivity shocks, the authors employed the methods proposed by Olley and Pakes (1996) and Levinsohn and Petrin (2003), respectively.
The results indicate that the proportion of female employees has positive effect on firms’ profit in 2002, but has no effect in 2007. This finding gives evidence of the existence of discrimination against female employees within the Brazilian labour market in the early 2000s, while the gender discrimination was reduced overtime.
This paper’s main contribution is to provide an approach that differs from that of previous research to determine whether discrimination exists within the Brazilian labour market. This paper also provides policy insights for Brazilian labour market.
The authors are very grateful to the editor and anonymous referees for their valuable comments that improved this paper. The authors would also like to thank the World Bank Group for allowing the authors to have access to the data used in this paper. This work was supported by JSPS KAKENHI Grant Number 21730228. All the analysis, interpretations and conclusions drawn from the data in this paper are entirely and solely those of the authors.
Liu, W., Nomura, T. and Nishijima, S. (2016), "Gender discrimination and firms’ profit: evidence from Brazil", Journal of Economic Studies, Vol. 43 No. 5, pp. 801-814. https://doi.org/10.1108/JES-06-2014-0093Download as .RIS
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