Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect

P. Francois, J.C. van Ours

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Abstract

We present a theoretical explanation of the gender wage gap which 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 than men.The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labor 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.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages36
Volume2000-85
Publication statusPublished - 2000

Publication series

NameCentER Discussion Paper
Volume2000-85

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Keywords

  • gender discrimination
  • household models
  • wage gap

Cite this

Francois, P., & van Ours, J. C. (2000). Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect. (CentER Discussion Paper; Vol. 2000-85). Macroeconomics.