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Representation over Rents: Labor Market Beliefs and the Gender Wage Gap

Author

Listed:
  • Christine Braun

    (University of Warwick)

  • Ana Figueiredo

    (Vrije Universiteit Amsterdam)

Abstract

We study how labor market beliefs shape the gender wage gap in an equilibrium search model with endogenous wage setting and hiring, in which workers hold subjective expectations about wage offers, job arrival rates, and separation risk. Using data from the Survey of Consumer Expectations to estimate the model, we find that gender differences in beliefs account for 25% of the gender wage gap. Correcting these beliefs partly narrows the gap but is not welfare-improving, as it reduces lifetime earnings for both men and women. In contrast, equalizing labor market fundamentals substantially reduces the wage gap while increasing women's lifetime earnings.

Suggested Citation

  • Christine Braun & Ana Figueiredo, 2026. "Representation over Rents: Labor Market Beliefs and the Gender Wage Gap," Tinbergen Institute Discussion Papers 26-077/VI, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20260077
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    Keywords

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    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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