Gender Wage Differentials in a Competitive Labour Market: The Household Interaction Effect
We present a theoretical explanation of the gender wage gap that turns on the interaction between men and women in households. In equilibria where men are over-represented in full-time work, we show that firms rationally choose to hire women only at strictly lower wages to men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labour market where there exist no inherent gender differences. We test our theory using CPS data over the period 1979–98 and find it is strongly supported by the data.
|Date of creation:||Nov 2000|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Altonji, Joseph G. & Blank, Rebecca M., 1999.
"Race and gender in the labor market,"
Handbook of Labor Economics,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259
- Bulow, Jeremy I & Summers, Lawrence H, 1986.
"A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment,"
Journal of Labor Economics,
University of Chicago Press, vol. 4(3), pages 376-414, July.
- Jeremy I. Bulow & Lawrence H. Summers, 1985. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment," NBER Working Papers 1666, National Bureau of Economic Research, Inc.
- Bowlus, Audra J, 1997.
"A Search Interpretation of Male-Female Wage Differentials,"
Journal of Labor Economics,
University of Chicago Press, vol. 15(4), pages 625-57, October.
- Bowlus, A.J., 1995. "A Search Interpretation of Male-Female Wage Differentials," UWO Department of Economics Working Papers 9504, University of Western Ontario, Department of Economics.
- Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
- Engineer, Merwan & Welling, Linda, 1999. "Human capital, true love, and gender roles: is sex destiny?," Journal of Economic Behavior & Organization, Elsevier, vol. 40(2), pages 155-178, October.
- William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Paul Milgrom & Sharon Oster, 1987.
"Job Discrimination, Market Forces, and the Invisibility Hypothesis,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 102(3), pages 453-476.
- Paul R. Milgrom, 1984. "Job Discrimination, Market Forces and the Invisibility Hypothesis," Cowles Foundation Discussion Papers 708R, Cowles Foundation for Research in Economics, Yale University, revised 1985.
- Elaine Sorensen, 1990. "The Crowding Hypothesis and Comparable Worth," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 55-89.
- Patrick Francois, 1996. "A Theory of Gender Discrimination Based on the Household," Working Papers 929, Queen's University, Department of Economics.
- Viscusi, W Kip, 1980. "Sex Differences in Worker Quitting," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 388-98, August.
- Paul Beaudry, 1994. "Entry Wages Signalling the Credibility of Future Wages: A Reinterpretation of the Turnover-Efficiency-Wage Model," Canadian Journal of Economics, Canadian Economics Association, vol. 27(4), pages 884-902, November.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:2603. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.