Mommy tracks and public policy: On self-fulfilling prophecies and gender gaps in hiring and promotion

Consider a model with two types of jobs. The profitability of hiring a worker to a fast-track job depends not only on his or her observable talent, but also on incontractible effort. We investigate whether self-fulfilling expectations may lead to higher hiring or promotion standards for women. If employers expect women to do more household work than men, thereby exerting less effort in their paid job, then women must be more talented to make it profitable to hire them. Specialization in the family will then result in women doing most of the household work. Such self-fulfilling prophecies can be defeated by affirmative action or family policy. However, it is unlikely that temporary policy can move the economy to a symmetric equilibrium: policy must be made permanent. Anti-discrimination policy need not enhance efficiency, and from a distribution viewpoint this is a policy with both winners and losers.