Study Finds Gender Pay Gap Widens When Workers Are Rehired After Layoffs

A new study by researchers at the Robert H. Smith School of Business at the University of Maryland and the University of North Carolina at Chapel Hill sheds new light on the gender gap in pay. The study found that when a company lays off workers and then rehires them once the economic situation improves, the gender pay gap tends to widen.

Liu Yang, an assistant professor at the University of Maryland and a co-author of the study, stated, “We show that women fall further behind men when they leave the same job for the same reason and get hired at the same new company. No matter how we look at the data, there is a difference and the women suffer more.”

The study found that in these situations the gender pay gap widens regardless of age, race, education, or seniority. But the widening of the pay gap tends to be less pronounced at firms where women make up a large percentage of the management team.

The study of plant closures and layoffs between 1993 and 2006 and subsequent company reorganizations and staffing efforts, showed that the gender pay gap tended to widen by about 5 percent when plants were restaffed.

The study has been accepted for publication in the Journal of Financial Economics.