The Distribution of the Gender Wage Gap: An Equilibrium Model

Sonia Bhalotra, Manuel Fernandez Sierra and Fan Wang

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We develop an equilibrium model of the labor market to investigate the joint evolution of gender gaps in labor force participation and wages. We do this overall and by task-based occupation and skill, which allows us to study distributional effects. We structurally estimate the model using data from Mexico over a period during which women's participation increased by fty percent. We provide new evidence that male and female labor are closer substitutes in high-paying analytical task-intensive occupations than in lower-paying manual and routine task-intensive occupations. We find that demand trends favored women, especially college-educated women. Consistent with these results, we see a widening of the gender wage gap at the lower end of the distribution, alongside a narrowing at the top. On the supply side, we find that increased appliance availability was the key driver of increases in the participation of unskilled women, and fertility decline a key driver for skilled women. The growth of appliances acted to widen the gender wage gap and the decline of fertility to narrow it. We also trace equilibrium impacts of growth in college attainment, which was more rapid among women, and of emigration, which was dominated by unskilled men. Our counterfactual estimates demonstrate that ignoring the countervailing effects of equilibrium wage adjustments on labor supplies, as is commonly done in the literature, can be misleading. JEL classifications: J16, J21, J24, J31, O33

Keywords: Female labor force participation; gender wage gap; technological change; supply-demand framework; task-based approach; wage distribution; wage inequality (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dev, nep-gen and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Distribution of the Gender Wage Gap: An Equilibrium Model (2022)
Working Paper: The Distribution of the Gender Wage Gap: An Equilibrium Model (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1404

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