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Gender wage differentials in a competitive labor market : the household interaction effect

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Author Info
Francois, P.
Ours, J.C. van (Tilburg University, Center for Economic Research)

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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.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 85.

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Date of creation: 2000
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Handle: RePEc:dgr:kubcen:200085

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Find related papers by 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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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Viscusi, W Kip, 1980. "Sex Differences in Worker Quitting," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 388-98, August. [Downloadable!] (restricted)
  2. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September. [Downloadable!] (restricted)
  3. Paul Beaudry, 1994. "Entry Wages Signalling the Credibility of Future Wages: A Reinterpretation of the Turnover-Efficiency-Wage Model," Canadian Journal of Economics, Canadian Economics Association, vol. 27(4), pages 884-902, November. [Downloadable!] (restricted)
  4. Patrick Francois, 1996. "A Theory of Gender Discrimination Based on the Household," Working Papers 929, Queen's University, Department of Economics.
  5. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-57, October. [Downloadable!] (restricted)
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  6. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier. [Downloadable!] (restricted)
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  7. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  8. Paul R. Milgrom, 1984. "Job Discrimination, Market Forces and the Invisibility Hypothesis," Cowles Foundation Discussion Papers 708R, Cowles Foundation, Yale University, revised 1985. [Downloadable!]
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  9. Darity, William A, Jr & Mason, Patrick L, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring. [Downloadable!] (restricted)
  10. Jeremy I. Bulow & Lawrence H. Summers, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment," NBER Working Papers 1666, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Engineer, Merwan & Welling, Linda, 1999. "Human capital, true love, and gender roles: is sex destiny?," Journal of Economic Behavior & Organization, Elsevier, vol. 40(2), pages 155-178, October. [Downloadable!] (restricted)
  12. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March. [Downloadable!] (restricted)
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  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. [Downloadable!]
  2. René Böheim & Helmut Hofer & Christine Zulehner, 2007. "Wage differences between Austrian men and women: semper idem?," Empirica, Springer, vol. 34(3), pages 213-229, July. [Downloadable!] (restricted)
  3. 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 A," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 22, pages 83-98, Abril. [Downloadable!] (restricted)
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