Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect
AbstractWe 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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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 202.
Length: 43 pages
Date of creation: Sep 2000
Date of revision:
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Other versions of this item:
- Francois, P. & Ours, J.C. van, 2000. "Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect," Discussion Paper 2000-85, Tilburg University, Center for Economic Research.
- Francois, Patrick & van Ours, Jan C, 2000. "Gender Wage Differentials in a Competitive Labour Market: The Household Interaction Effect," CEPR Discussion Papers 2603, C.E.P.R. Discussion Papers.
- 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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