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Gender complementarities in the labor market

  • Giacomo De Giorgi

    ()

    (Stanford University, BREAD, CEPR and NBER)

  • Marco Paccagnella

    ()

    (Bank of Italy and fRDB)

  • Michele Pellizzari

    ()

    (OECD, University of Geneva and IZA)

In this paper we estimate the short-run elasticity of substitution between male and female workers, using data on employment and wages from Italian provinces from 1993-2006. We adopt a production function approach similar to that of Card and Lemieux (2001a) and Acemoglu, Autor and Lyle (2004). Our identification strategy relies on a natural experiment. In 2000 the Italian parliament passed a law to abolish compulsory military service; the reform was implemented through a gradual reduction in the number of draftees, and compulsory drafting was definitively terminated in 2004. We use data on the (planned) maximum number of draftees at the national level (as stated in the annual budgetary law), interacted with sex-ratios at birth at the provincial level, as instruments for (relative) female labor supply. Our results suggest that young males and females are imperfect substitutes, with an elasticity of substitution ranging between 1.1 and 1.6. Our results have implications for the evaluation of policies aimed at increasing female labor market participation, suggesting that they do not necessarily displace male employment.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 183.

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Date of creation: Jun 2013
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Handle: RePEc:bdi:opques:qef_183_13
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