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Macroeconomic costs of gender gaps in a model with entrepreneurship and household production

Author

Listed:
  • Cuberes David

    (Clark University, Worcester, MA, USA)

  • Teignier Marc

    (Universitat de Barcelona and BEAT, Barcelona, Spain)

Abstract

This paper examines the quantitative effects of gender gaps in entrepreneurship and workforce participation in an occupational choice model with a household sector and endogenous female labor supply. Gender gaps in workforce participation have a direct negative effect on market, while gender gaps in entrepreneurship affect negatively market output not only by reducing wages and labor force participation but also by reducing the average talent of entrepreneurs and aggregate productivity. We estimate the effects of these gender gaps for 37 European countries, as well as the United States, and find that gender gaps cause an average loss of 17.5% in market output and 13.2% in total output, which also includes household output. Interestingly, the total output loss would be similar (12%) in a model without household sector, since the market output loss is larger when the female labor supply is endogenous. Eastern Europe is the region with the lowest income fall due to gender gaps, while Southern Europe is the region with the largest fall. Northern Europe is the region with the largest productivity fall, which is due to the presence of high gender gaps in entrepreneurship.

Suggested Citation

  • Cuberes David & Teignier Marc, 2018. "Macroeconomic costs of gender gaps in a model with entrepreneurship and household production," The B.E. Journal of Macroeconomics, De Gruyter, vol. 18(1), pages 1-15, January.
    • Handle: RePEc:bpj:bejmac:v:18:y:2018:i:1:p:15:n:5
    DOI: 10.1515/bejm-2017-0031
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    Citations

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    Cited by:

    1. João Galindo da Fonseca & Charles Berubé, 2023. "Spouses, Children, And Entrepreneurship," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(3), pages 1165-1199, August.
    2. Ranasinghe, Ashantha, 2024. "Misallocation across establishment gender," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 183-206.
    3. Islam, Asif M. & Amin, Mohammad, 2023. "The gender labor productivity gap across informal firms," World Development, Elsevier, vol. 167(C).
    4. Amparo Serrano‐Pascual & Carlota Carretero‐García, 2022. "Women’s entrepreneurial subjectivity under scrutiny: Expert knowledge on gender and entrepreneurship," Gender, Work and Organization, Wiley Blackwell, vol. 29(2), pages 666-686, March.
    5. Miguel A. Mascarúa Lara, 2024. "Differences in the labor market by gender and aggregate income," Working Papers 2024-05, Banco de México.

    More about this item

    Keywords

    gender inequality; household production; factor misallocation; aggregate productivity;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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