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Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect

Author

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  • Francois, Patrick

    (Tilburg University)

  • van Ours, Jan C.

    (Erasmus School of Economics)

Abstract

We present a theoretical explanation of the gender wage gap which turns on the interaction between men and women in households. In equilibria where men are over-represented in full-time work, we show that firms rationally choose to hire women only at strictly lower wages than men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labor market where there exist no inherent gender differences. We test our theory using CPS data over the period 1979-98 and find it is strongly supported by the data.

Suggested Citation

  • Francois, Patrick & van Ours, Jan C., 2000. "Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect," IZA Discussion Papers 202, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp202
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    References listed on IDEAS

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    Cited by:

    1. Barth, Erling & Kerr, Sari Pekkala & Olivetti, Claudia, 2021. "The dynamics of gender earnings differentials: Evidence from establishment data," European Economic Review, Elsevier, vol. 134(C).
    2. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    3. David de la Croix & Marie Vander Donckt, 2010. "Would Empowering Women Initiate the Demographic Transition in Least Developed Countries?," Journal of Human Capital, University of Chicago Press, vol. 4(2), pages 85-129.
    4. B. Burcin Yurtoglu & Christine Zulehner, 2007. "The gender wage gap in top corporate jobs is still there," Vienna Economics Papers vie0701, University of Vienna, Department of Economics.
    5. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    6. Natalia Soboleva, 2014. "Gender Attitudes In The World Of Work: Cross-Cultural Comparison," HSE Working papers WP BRP 46/SOC/2014, National Research University Higher School of Economics.
    7. B. Burcin Yurtoglu & Christine Zulehner, 2007. "The gender wage gap in top corporate jobs is still there," Vienna Economics Papers 0701, University of Vienna, Department of Economics.
    8. Magda, Iga & Bukowski, Maciej & Buchholz, Sonia & Lewandowski, Piotr & Chrostek, Paweł & Kamińska, Agnieszka & Lis, Maciej & Potoczna, Monika & Myck, Michał & Kundera, Michał & Oczkowska, Monika, 2013. "Employment in Poland 2011 - Poverty and jobs," MPRA Paper 50185, University Library of Munich, Germany.
    9. Frédéric Palomino & Eloïc-Anil Peyrache, 2010. "Psychological Bias and Gender Wage Gap," Post-Print hal-00911836, HAL.
    10. René Böheim & Helmut Hofer & Christine Zulehner, 2007. "Wage differences between Austrian men and women: semper idem?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(3), pages 213-229, July.
    11. Palomino, Frédéric & Peyrache, Eloïc-Anil, 2010. "Psychological bias and gender wage gap," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 563-573, December.
    12. Saurina Canals, C. & Saez Zafra, M., 2004. "Estudio empírico en población femenina sobre condiciones de aceptación de empleo a tiempo parcial: Un modelo de decisiones múltiples./Empirical Study of the Conditions for Taking a Part Time Job Among," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 22, pages 83-98, Abril.

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    More about this item

    Keywords

    Gender discrimination; household models; wage gap;
    All these keywords.

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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