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Labor Market Quotas When Promotions Are Signals

Author

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  • Suzanne H. Bijkerk
  • Silvia Dominguez-Martinez
  • Jurjen Kamphorst
  • Otto H. Swank

Abstract

We analyze the consequences of labor market quotas for the wages of women in high-level positions. Labor market quotas create uncertainty about the reason a woman is promoted. Firms know whether they promoted female employees because of the quota or their ability; their competitors do not. A winner’s curse, reducing competition for women in high-level positions, results. This widens the gender pay gap for these women. Ex ante, women are better off without quotas. Next we investigate how quotas affect incentives for employers to learn women’s abilities to make better job assignment decisions. Then, under specific conditions women may benefit.

Suggested Citation

  • Suzanne H. Bijkerk & Silvia Dominguez-Martinez & Jurjen Kamphorst & Otto H. Swank, 2021. "Labor Market Quotas When Promotions Are Signals," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 437-460.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/710358
    DOI: 10.1086/710358
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    Cited by:

    1. Oliver Gürtler & Lennart Struth, 2021. "Do Workers Benefit from Wage Transparency Rules?," ECONtribute Discussion Papers Series 105, University of Bonn and University of Cologne, Germany.
    2. Lennart Struth & Max Thon, 2022. "Discrimination, Quotas, and Stereotypes," ECONtribute Discussion Papers Series 188, University of Bonn and University of Cologne, Germany.

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