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The Intangible Gender Gap: An Asset Channel of Inequality

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Abstract

We propose an "asset channel of inequality" that contributes to gender inequities. We establish that industries with low (high) gender pay gaps have high (low) shares of tangible assets. Because asset tangibility determines firms' ability to collateralize assets and borrow, credit conditions affect industries differently. We show that credit expansions further reduce the pay gap in low-pay-gap industries while leaving it unaffected in high-pay-gap industries, making low-pay-gap industries more appealing for women. Consequently, gender sorting across industries increases, which then cements gender roles and accentuates workplace gender bias. Ultimately, credit expansions help women "swim upstream" but also reinforce glass ceilings.

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  • Carlos F. Avenancio-León & Leslie Sheng Shen, 2021. "The Intangible Gender Gap: An Asset Channel of Inequality," International Finance Discussion Papers 1322, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgif:1322
    DOI: 10.17016/IFDP.2021.1322
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    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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