On Gender Gaps and Self-fulfilling Expectations: Theory, Policies and Some Empirical Evidence

Sara De La Rica, Juan Dolado and Cecilia Garcia-Penalosa ()

No 3553, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper considers a simple model of self-fulfilling expectations that leads to a multiple equilibrium of gender gaps in wages and participation rates. Rather than resorting to moral hazard problems related to unobservable effort, like in most of the related literature, our model fully relies on statistical discrimination. If firms believe that women will quit their jobs more often than equally productive men when shocks affecting household chores take place, our model predicts that this belief will increase the wage gap in favour of men which, in turn, will exacerbate lower female participation in the labour market. Hence, both effects lead to a gendered equilibrium with large gaps, even though an ungendered equilibrium with no gaps is feasible. We examine the effects of gender-based and gender-neutral subsidies and find that the latter are more effective in removing the gendered equilibrium. Empirical analysis based on a time use survey for Spain is provided to test some implications of the model.

Keywords: gender gaps; self-fulfilling expectations; gender policies; time-use surveys (search for similar items in EconPapers)
JEL-codes: J12 J16 J18 J22 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008-06
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Economic Inquiry, 2012, 51 (3), 1829-1848

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Related works:
Working Paper: On Gender Gaps and Self-fulfilling Expectations: Theory, Policies and Some Empirical Evidence (2008)
Working Paper: On gender gaps and self-fulfilling expectations: Theory, policies and some empirical evidence (2008)
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