ILPC 2027

Traditionally, research on gender wage gap (GWG hereafter) has been focused on the organisational and workplace level. In recent years, there has been an increasing interest in the macroinstitutional level because substantial differences exist between countries. This new approach highlights the role of wage-setting institutions and labour market legislation to explain the widening of the GWG. However, further empirical studies are needed to support the argument that a relationship exists between regulations and earnings differentials between men and women. Our paper contributes to this research agenda and addresses the following questions: how do national institutional settings affect GWG? Are there common trends between countries? To answer these questions, we use Fuzzy Set Qualitative Comparative Analysis (fsQCA) to cluster 21 European countries according to the level of employment protection and the level of coordination in the industrial relations system. Furthermore, we add two conditions to consider other national specificities, notably the size of the manufacturing sector and the female employment rate. The results of this study point to three configurations that lead to high GWG. The first one combines a low share of jobs in the manufacturing sector, low employment protection and low coordination in the industrial relations system. This configuration covers Ireland and the United Kingdom (UK). The second one combines a high employment rate of women, low employment protection and high coordination in the industrial relations system. This configuration covers the Netherlands, Finland, Sweden, Germany, Austria and Denmark. The last configuration combines a high share of jobs in the manufacturing sector, high employment protection and low coordination in the industrial relations system. This path covers Portugal, France, Italy and Slovenia. To complement the fsQCA analysis, a qualitative discussion is provided of the three identified configurations. The results achieved suggest that labour market regulation – high job security and high coordination – is crucial to prevent high GWG since deregulation leads to high inequalities (see the first configuration). Notwithstanding, our results also show that other two configurations lead to high GWG. In each of these two configurations, some kind of deregulation takes place. Therefore, we argue that relaxing employment protection or lowering the coordination of industrial relations is a necessary condition to widen the GWG. Furthermore, considering the countries covered by each configuration, our results indicate that a high GWG is possible in liberal market economies, coordinated market economies and mixed-market economies. We conclude that national political-economic institutions play an important role because different configurations are identified, but there are common features between capitalist economies. Indeed, a high GWG is found in countries with different institutional legacies. Therefore, it is necessary to connect the comparative political economy literature, which emphasises the role of national models of capitalism, with the growing literature on the communalities between capitalist economies.