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Aggregate Effects of Gender Gaps in the Labor Market: A Quantitative Estimate

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  • David Cuberes
  • Marc Teignier

Abstract

This paper examines the quantitative effects of gender gaps in entrepreneurship and workforce participation. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability. Gender gaps in entrepreneurship affect negatively both income and aggregate productivity, since they reduce the entrepreneurs’ average talent. Specifically, the expected income loss from excluding 5 percent of women is 2.5 percent, while the loss is 10 percent if they are all employers. We find that gender gaps cause an average income loss of 15 percent in the OECD, 40 percent of which is due to entrepreneurship gaps. Extending the model to developing countries, we obtain substantially higher losses, with significant variation across regions.

Suggested Citation

  • David Cuberes & Marc Teignier, 2016. "Aggregate Effects of Gender Gaps in the Labor Market: A Quantitative Estimate," Journal of Human Capital, University of Chicago Press, vol. 10(1), pages 1-32.
  • Handle: RePEc:ucp:jhucap:doi:10.1086/683847
    DOI: 10.1086/683847
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    1. Dhritman Bhattacharya & Nezih Guner & Gustavo Ventura, 2013. "Distortions, Endogenous Managerial Skills and Productivity Differences," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 11-25, January.
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    3. Marianne Bertrand & Sandra E Black & Sissel Jensen & Adriana Lleras-Muney, 2019. "Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labour Market Outcomes in Norway," Review of Economic Studies, Oxford University Press, vol. 86(1), pages 191-239.
    4. Francisco Parro, 2012. "International Evidence on the Gender Gap in Education over the Past Six Decades: A Puzzle and an Answer to It," Journal of Human Capital, University of Chicago Press, vol. 6(2), pages 150-185.
    5. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
    6. Esteve-Volart, Berta, 2004. "Gender discrimination and growth: theory and evidence from India," LSE Research Online Documents on Economics 6641, London School of Economics and Political Science, LSE Library.
    7. David Cuberes & Marc Teignier, 2014. "Gender Inequality And Economic Growth: A Critical Review," Journal of International Development, John Wiley & Sons, Ltd., vol. 26(2), pages 260-276, March.
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    Cited by:

    1. Stephan Klasen, "undated". "From 'MeToo' to Boko Haram: A survey of levels and trends of gender inequality in the world," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 263, Courant Research Centre PEG.
    2. Almarina Gramozi & Theodore Palivos & Marios Zachariadis, 2019. "Talent Misallocation in Europe," University of Cyprus Working Papers in Economics 05-2019, University of Cyprus Department of Economics.
    3. Susana Martínez-Restrepo & Juan Camilo Mejía & Erika Enríquez, 2016. "Eliciting women's willingness to take a job. Evidence from displaced and extremely poor women in Cali, Colombia," Coyuntura Económica, Fedesarrollo, vol. 46(1), pages 149-173, June.
    4. Purva Khera, 2018. "Closing Gender Gaps in India: Does Increasing Womens’ Access to Finance Help?," IMF Working Papers 18/212, International Monetary Fund.
    5. Cerciello, Massimiliano & Agovino, Massimiliano & Garofalo, Antonio, 2019. "The caring hand that cripples? The effects of the European regional policy on local labour market participation in Southern Italy," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    6. J. Ignacio Conde-Ruiz & Manu García & Manuel Yáñez, 2018. "Diversidad de Género en los Consejos: el caso de España tras la Ley de Igualdad," Studies on the Spanish Economy eee2018-29, FEDEA.
    7. Romina Kazandjian & Lisa Kolovich & Kalpana Kochhar & Monique Newiak, 2019. "Gender Equality and Economic Diversification," Social Sciences, MDPI, Open Access Journal, vol. 8(4), pages 1-24, April.
    8. Cooke, Dudley & Fernandes, Ana P. & Ferreira, Priscila, 2019. "Product market competition and gender discrimination," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 496-522.
    9. Klasen, Stephan, 2020. "From ‘MeToo’ to Boko Haram: A survey of levels and trends of gender inequality in the world," World Development, Elsevier, vol. 128(C).
    10. Minasyan, Anna & Zenker, Juliane & Klasen, Stephan & Vollmer, Sebastian, 2019. "Educational gender gaps and economic growth: A systematic review and meta-regression analysis," World Development, Elsevier, vol. 122(C), pages 199-217.
    11. Flabbi, Luca & Piras, Claudia & Tejada, Mauricio & Bustelo, Monserrat, 2020. "Female Labor Force Participation, Labor Market Dynamic and Growth in LAC," IDB Publications (Working Papers) 9420, Inter-American Development Bank.
    12. Sonali Jain-Chandra & Kalpana Kochhar & Monique Newiak & Yang Yang & Edda Zoli, 2018. "Gender Equality: Which Policies Have the Biggest Bang for the Buck?," IMF Working Papers 18/105, International Monetary Fund.
    13. Diego Aboal & Maren Vairo, 2018. "The impact of subsidies for researchers on the gender scientific productivity gap," Science and Public Policy, Oxford University Press, vol. 45(4), pages 515-532.
    14. Abdulla, Kanat, 2019. "Productivity gains from reallocation of talent in Brazil and India," Journal of Macroeconomics, Elsevier, vol. 62(C).
    15. Elizabeta Tosheva & Monika Angeloska Dichovska, 2018. "Exploring Entrepreneurial Motivations And Barriers: A Study Of Women Bussines Owners In The Republic Of Macedonia," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 23-36, December.

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