Families’ Career Investments and Firms’ Promotion Decisions

Frederik Almar, Benjamin Friedrich, Ana Reynoso, Bastian Schulz and Rune Vejlin

No 33438, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how family and firm investments interact to explain gender gaps in career achievement. Using Danish administrative data, we first document novel evidence of this interaction through a “spousal effect” on firm-side career investments. This effect is accounted for by family labor supply choices that shape worker characteristics, which then influence firms’ training and promotion decisions. Our main theoretical contribution is to develop a quantitative life cycle model that captures these family-firm interactions through household formation, families’ joint career and fertility choices, and firms’ managerial training and promotion decisions. We then use the estimated model to show that the interaction between families and firms in the joint equilibrium of labor and marriage markets is important when evaluating firm-side and family-side policy interventions. We find that gender-equal parental leave and a managerial quota can both improve gender equality, but leave implies costly skill depreciation, whereas the quota raises aggregate welfare, in part through adjustments in marital sorting towards families that invest in women.

JEL-codes: J12 J13 J18 J21 J24 J70 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-dem and nep-lab
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Working Paper: Families’ Career Investments and Firms’ Promotion Decisions (2025)
Working Paper: Families’ Career Investments and Firms’ Promotion Decisions (2025)
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