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

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  • van Ours, Jan C.
  • Francois, Patrick

Abstract

We present a theoretical explanation of the gender wage gap that 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 to men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labour 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

  • van Ours, Jan C. & Francois, Patrick, 2000. "Gender Wage Differentials in a Competitive Labour Market: The Household Interaction Effect," CEPR Discussion Papers 2603, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2603
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    Cited by:

    1. 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.
    2. 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).
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Frédéric Palomino & Eloïc-Anil Peyrache, 2010. "Psychological Bias and Gender Wage Gap," Post-Print hal-00911836, HAL.
    8. 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.
    9. 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.
    10. 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.
    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:

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

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