Equal Treatment, Unequal Family Duties: Gendered Screening and Selective Exclusion in the Workplace

Can a ban on explicit gender discrimination in hiring and compensation unintentionally reinforce labor market inequalities when family duties remain unequally distributed across genders? This paper develops a theoretical model to address this question in a monopsonistic labor market where workers differ in gender-specific outside options and labor-supply costs—driven by family responsibilities—but exhibit the same underlying heterogeneity in effort costs. We compare outcomes under gender-based tagging and gender-neutral screening. When tagging is allowed, the firm offers efficient, gender-specific contracts. Under gender-neutral screening, by contrast, interacting incentive and participation constraints distort both the extensive and intensive margins of labor supply, amplifying gender gaps in employment, effort, labor income, and wages. The model identifies five regimes and yields a paradox: as women’s outside options approach men’s, gender-neutral screening can intensify female exclusion. Improved female opportunities make the contracts intended for women more attractive to men. To prevent mimicking, the firm distorts these contracts and hires fewer women than under tagging. For a given efficiency type, the firm’s cost of gender neutrality peaks when selective exclusion of that type begins, and gender gaps in employment and labor income widen. Unless family duties are shared more equally, equal treatment may therefore produce more unequal workplace outcomes.