Plant Behavior & Equal Pay: The Effect on Female Employment, Capital Investments, & Productivity — A Difference-in-Discontinuities Design

This paper studies Chile's 2009 Equal Pay for Equal Work law and its impact on manufacturing plant behavior. Using a difference-in-discontinuities design to exploit the law's quasi-experimental properties, I find that large plants with disclosure requirements and higher penalties boost automation by increasing investment in new machinery relative to plants in the control group. Although total female employment increases, the female percentage increases only for executives and white-collar workers but not for blue-collar workers, highlighting unintended distributional consequences in female presentation across occupations. In terms of plant performance, average compensation package increases, but plant productivity and profitability measures show no significant differences from the control group. These findings are consistent with the imperfect competition models in the female labor market that predict that occupations with wider gender pay gaps would see the largest bumps in relative female employment under equal pay.