Gender and Racial Wage Differentials in Nonprofit Hospitals*

Past studies have found that economy‐wide gender and racial wage differentials are smaller in the nonprofit sector than in the for‐profit sector. I show that the massive US hospital industry exhibits a different pattern. Gender and racial differentials in nonprofit hospitals are larger than in the for‐profit hospitals. These findings are robust to various model specifications and appear throughout the earnings distribution and in most subsamples. Critically, the findings remain even after controlling for individual fixed effects. I argue this may reflect weakened monitoring in nonprofit hospitals and contrast this with the traditional theory that nonprofits must emphasize wage equality to motivate their workers.