Wage Gaps, Earnings Gaps, and the Market Power of Employers

Women are less mobile between firms than men which gives employers more market power over women and explains parts of the gender wage gap. I rationalize this observation as a consequence of different gender roles in the household. The higher a spouse's earnings, the more likely relative wage differences outweigh utility differences between jobs. About 87\% of estimated differences in inter-firm mobility are attributed to this effect and are, thus, endogenous. This implies mutually enforcing cycles between wage gaps, earnings gaps, and employers' market power and has implications for the effects of labor-market policies.