Glass ceiling and belief flipping : theory and evidence from Egypt

This paper proposes a dynamic statistical-discrimination model of job assignment and promotion which takes into account the endogeneity of human-capital investment and where the employer’s prior beliefs are self-fulfilling in equilibrium. The model shows that the equilibrium results from standard statistical-discrimination models may change when we account for discrimination/self-selection in hiring via the employer’s beliefs about worker expected quit rates and ability. The model is estimated on the Egyptian labour market using a multivariate simulated maximum likelihood model, and the results confirm the model’s predictions. When women face significant adversity in hiring, those women who overcome this initial discrimination are as likely to be promoted as their male counterparts with similar characteristics.