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Assortative Marriage and the Effects of Government Homecare Subsidy Programs on Gender Wage and Participation Inequality

  • Bjerk, David
  • Han, Seungjin

We develop a model of the labor market where firms incur an adjustment cost when one of their workers quits, and males and females form households assortatively by skill. We show how this environment can lead to an economy where females earn less and drop out more frequently than equally skilled males in equilibrium, even when males and females constitute ex-ante identical populations. We then examine how different government homecare subsidy schemes may affect such gender inequality in the labor market. We show that the effect of government homecare subsidy schemes on gender inequality depends crucially on the form in which the subsidy is given and to whom it is allocated.

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Paper provided by Vancouver School of Economics in its series working papers with number bjerk-05-11-21-10-55-45.

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Length: 20 pages
Date of creation: 21 Nov 2005
Date of revision: 06 Sep 2006
Handle: RePEc:ubc:pmicro:bjerk-05-11-21-10-55-45
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  1. Wood, Robert G & Corcoran, Mary E & Courant, Paul N, 1993. "Pay Differences among the Highly Paid: The Male-Female Earnings Gap in Lawyers' Salaries," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 417-41, July.
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  9. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  10. Mary Corcoran & Greg J. Duncan, 1979. "Work History, Labor Force Attachment, and Earnings Differences between the Races and Sexes," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 3-20.
  11. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
  12. Goldin, Claudia & Polachek, Solomon, 1987. "Residual Differences by Sex: Perspectives on the Gender Gap in Earnings," American Economic Review, American Economic Association, vol. 77(2), pages 143-51, May.
  13. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  14. Gordon Cleveland & Morley Gunderson & Douglas Hyatt, 1996. "Child Care Costs and the Employment Decision of Women: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 132-51, February.
  15. Francois, Patrick, 1998. "Gender discrimination without gender difference: theory and policy responses," Journal of Public Economics, Elsevier, vol. 68(1), pages 1-32, April.
  16. Zhenchao Qian, 1998. "Changes in assortative mating: The impact of age and education, 1970–1890," Demography, Springer, vol. 35(3), pages 279-292, August.
  17. O'Neill, June & Polachek, Solomon, 1993. "Why the Gender Gap in Wages Narrowed in the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 205-28, January.
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