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Why does the schooling gap close while the wage gap persists across country income comparisons?

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  • Karapanagiotis, Pantelis
  • Reimers, Paul

Abstract

The schooling gap diminishes because the services sector becomes more pronounced for high-income countries, and the paid hours gap closes. Although gender wage inequality persists across country income groups, differences in schooling years between females and males diminish. We assemble a novel dataset, calibrate a general equilibrium, multi-sector, -gender, and -production technology model, and show that gender-specific sectoral comparative advantages explain the paid hours and schooling gap decline from low- to high-income economies even when the wage gap persists. Additionally, our counterfactual analyses indicate that consumption subsistence and production share heterogeneity across both income groups and genders are essential to explain the co-decline of the schooling and paid hours gaps. Our results highlight effective mechanisms for policies aiming to reduce gender inequality in schooling and suggest that the schooling gap decline and the de-invisibilization of female paid work observed in high-income countries are linked by structural sector movements instead of wage inequality reductions.

Suggested Citation

  • Karapanagiotis, Pantelis & Reimers, Paul, 2024. "Why does the schooling gap close while the wage gap persists across country income comparisons?," Journal of Economic Dynamics and Control, Elsevier, vol. 159(C).
  • Handle: RePEc:eee:dyncon:v:159:y:2024:i:c:s0165188923002117
    DOI: 10.1016/j.jedc.2023.104805
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    More about this item

    Keywords

    Development; Gender gaps; Labor; Education; Structural change;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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