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On Gender Gaps and Self-fulfilling Expectations: Theory, Policies and Some Empirical Evidence

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  • de la Rica, Sara
  • Dolado, Juan J.
  • García-Peñalosa, Cecilia

Abstract

This paper considers a simple model of self-fulfilling expectations that leads to a multiple equilibrium of gender gaps in wages and participation rates. Rather than resorting to moral hazard problems related to unobservable effort, like in most of the related literature, our model fully relies on statistical discrimination. If firms believe that women will quit their jobs more often than equally productive men when shocks affecting household chores take place, our model predicts that this belief will increase the wage gap in favour of men which, in turn, will increase the female share of housework and exacerbate lower female participation in the labour market. Hence, both effects lead to a gendered equilibrium with large gaps, even though an ungendered equilibrium with no gaps is feasible. We examine the effects of gender-based and gender-neutral subsidies and find that the latter are more effective in removing the gendered equilibrium. Empirical analysis based on a time use survey for Spain is provided to test most of the implications of the model.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6883.

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Date of creation: Jun 2008
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Handle: RePEc:cpr:ceprdp:6883

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Keywords: gender wage gap; multiple equilibria; participation;

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Cited by:
  1. Albert López-Ibor, Rocío & Escot Mangas, Lorenzo & Fernández Cornejo, José Andrés, 2010. "La predisposición de las estudiantes universitarias a auto-limitarse profesionalmente en el futuro por razones de conciliación/The Predisposition of Feminine University Students to Professional Self," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 203 (32 pá, Abril.
  2. de la Rica, Sara & Dolado, Juan J. & Vegas, Raquel, 2010. "Performance Pay and the Gender Wage Gap: Evidence from Spain," CEPR Discussion Papers 7936, C.E.P.R. Discussion Papers.

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