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

Jan van Ours and Patrick Francois ()

No 2603, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We present a theoretical explanation of the gender wage gap that 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 to men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labour 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.

Keywords: Gender discrimination; Household models; Wage gap (search for similar items in EconPapers)
JEL-codes: J16 J41 J71 (search for similar items in EconPapers)
Date: 2000-11
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect (2000)
Working Paper: Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect (2000)
Working Paper: Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect (2000)
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