Why does the schooling gap close while the wage gap persists across country income comparisons?

Pantelis Karapanagiotis and Paul Reimers

Journal of Economic Dynamics and Control, 2024, vol. 159, issue C

Abstract: The schooling gap diminishes because the services sector becomes more pronounced for high-income countries, and the paid hours gap closes. Although gender wage inequality persists across country income groups, differences in schooling years between females and males diminish. We assemble a novel dataset, calibrate a general equilibrium, multi-sector, -gender, and -production technology model, and show that gender-specific sectoral comparative advantages explain the paid hours and schooling gap decline from low- to high-income economies even when the wage gap persists. Additionally, our counterfactual analyses indicate that consumption subsistence and production share heterogeneity across both income groups and genders are essential to explain the co-decline of the schooling and paid hours gaps. Our results highlight effective mechanisms for policies aiming to reduce gender inequality in schooling and suggest that the schooling gap decline and the de-invisibilization of female paid work observed in high-income countries are linked by structural sector movements instead of wage inequality reductions.

Keywords: Development; Gender gaps; Labor; Education; Structural change (search for similar items in EconPapers)
JEL-codes: I24 I25 J16 J24 O41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:159:y:2024:i:c:s0165188923002117

DOI: 10.1016/j.jedc.2023.104805

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