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Estimating a Dynamic Adverse-Selection Model: Labour-Force Experience and the Changing Gender Earnings Gap 1968--1997

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  • George-Levi Gayle
  • Limor Golan

Abstract

This paper addresses two questions: What accounts for the gender gap in labour-market outcomes? What are the driving forces behind the changes in the gender labour-market outcomes over the period 1968--1997? It formulates a dynamic general equilibrium model of labour supply, occupational sorting, and human-capital accumulation in which gender discrimination and an earnings gap arise endogenously. It uses this model to quantify the driving forces behind the decline in the gender earnings gap and the increase in female labour-force participation, the proportion of women working in professional occupations, and hours worked. It finds that labour-market experience is the most important factor explaining the gender earnings gap. In addition, statistical discrimination accounts for a large fraction of the observed gender earnings gap and its decline. It also finds that a large increase in aggregate productivity in professional occupations plays a major role in the increase in female labour-force participation, number of hours worked, and the proportion of females working in professional occupations. Although of less importance, demographic changes account for a substantial part of the increase in female labour-force participation and hours worked, whereas home production technology shocks do not. Copyright 2012, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/restud/rdr019
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Bibliographic Info

Article provided by Oxford University Press in its journal The Review of Economic Studies.

Volume (Year): 79 (2012)
Issue (Month): 1 ()
Pages: 227-267

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Handle: RePEc:oup:restud:v:79:y:2012:i:1:p:227-267

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Cited by:
  1. Zvi Eckstein & Osnat Lifshitz, 2011. "Dynamic Female Labor Supply," Econometrica, Econometric Society, vol. 79(6), pages 1675-1726, November.
  2. Raquel Fernandez, 2009. "Culture as Learning: The Evolution of Female Labor Force Participation over a Century," 2009 Meeting Papers 78, Society for Economic Dynamics.

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