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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.

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  • 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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