Foreign ownership and gender differences in pay: causal evidence from a sample of Polish workers

Abstract

The study attempts to estimate the causal relationship between foreign company ownership and wages that is driven by ownership per se, and not by observable or unobservable worker and firm characteristics. We employ proprietary data from surveys conducted by Sedlak & Sedlak, a major Polish HR consulting firm, with our pooled cross-section data set comprising over 300,000 men and 250,000 women working in the Polish labor market between 2013 and 2017. The foreign-firm wage premium is estimated by several techniques, ranging from ordinary least squares and two-stage least squares to a recently developed frequentist RX-2SLS econometric procedure that relaxes IV assumptions via the exclusion restriction. Our major findings are: (1) regardless of gender, Polish workers employed by majority foreign capital firms earn a significant wage premium; and (2) the foreign-firm wage premium is substantially larger for women, suggesting that the wage policies used by foreign-owned firms in Poland have an equalizing effect on the gender wage gap.