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Discrimination in a search and matching model with self-employment

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  • Jonathan Lain

    (Organisation for Economic Co-operation and Development)

Abstract

In many urban African labour markets, women outnumber men in self-employment, even though gender earnings gaps are larger for the self-employed than the wage-employed. In this paper, we suggest an explanation for this pattern using a search and matching model that allows for individual heterogeneity and participation in both self- and wage-employment as well as discrimination against women in the wage sector. We show that discrimination in wage-employment can generate gender earnings gaps across all sectors of the economy, even if the underlying ability distributions for women and men are identical. This result arises because discrimination creates extra frictions for women, making it harder for them to select occupations according to their comparative advantage. Moreover, the earnings gaps that arise turn out to be larger for the self-employed, even though it is not the self-employment sector that is characterised by discrimination. Policy makers may therefore need to target the wage sector in order to address gender inequality for the self-employed.

Suggested Citation

  • Jonathan Lain, 2019. "Discrimination in a search and matching model with self-employment," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-35, December.
    • Handle: RePEc:spr:izamig:v:9:y:2019:i:1:d:10.1186_s40176-019-0140-3
    DOI: 10.1186/s40176-019-0140-3
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    2. M. Antonella Mancino & Leonardo Fabio Morales & Diego F. Salazar, 2023. "Signaling Worker Quality in a Developing Country: Lessons from a Certification Program," Borradores de Economia 1259, Banco de la Republica de Colombia.
    3. M. Antonella Mancino, 2022. "A Search Model Of Early Employment Careers And Youth Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 329-390, February.

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    More about this item

    Keywords

    J46; J60; J71;
    All these keywords.

    JEL classification:

    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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