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Differences in the labor market by gender and aggregate income

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  • Miguel A. Mascarúa Lara

Abstract

What are the effects on the labor market and aggregate income of frictions that restrict women's labor decisions that impede labor participation and composition being equal between men and women? To answer this question, I develop an occupational general equilibrium model with heterogeneous agents facing gender-based restrictions in labor participation and job selection. Then, I include an endogenous distribution of the size of formal and informal establishments and workers to replicate the Mexican data. Finally, I use the ENOE to calibrate the model and estimate gender-based frictions in the labor market in states and regions of Mexico and their effect on aggregate income. According to the model, aggregate income could increase by 4.3% without women's restrictions to entrepreneurship and by 32.1% without restrictions to entry and entrepreneurship. In addition, the southern states would witness the largest increases.

Suggested Citation

  • Miguel A. Mascarúa Lara, 2024. "Differences in the labor market by gender and aggregate income," Working Papers 2024-05, Banco de México.
    • Handle: RePEc:bdm:wpaper:2024-05
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    More about this item

    Keywords

    Misallocation; female entrepreneurship; gender frictions; informality;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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