Sex, wages, and productivity: An empirical analysis of Israeli firm-level data

Sex discrimination in labor markets may generate a wage gap between men and women that exceeds any gap in marginal productivity. We test for this type of discrimination using unique firm-level data on manufacturing firms in I srael. There is a statistically significant negative association between wa ges and the proportion of a firm's workforce that is female. However, there is also a statistically significant negative association between marginal productivity and the proportion of females. The difference between the wage and productivity gaps is small relative to wage-regression estimates of wa ge discrimination, and is not statistically significant, which is most cons istent with no discrimination.