[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/4984.html
   My bibliography  Save this paper

Home Production, Market Production and the Gender Wage Gap: Incentives and Expectations

Author

Listed:
  • Olivetti, Claudia
  • Albanesi, Stefania
Abstract
This paper explores the hypothesis that gender wage differentials arise from the interaction between the intra-household allocation of labour and the contractual relation between firms and workers in the presence of private information on workers? labour market attachment. In our model, if firms believe women to be less attached to market work than men, they will offer them labour contracts with lower earnings and lower hours even in the absence of gender differences in productivity. This implies that it is efficient for wives to allocate more time to home production. Hence, women will be less attached to market work and firms? expectations are confirmed. If firms instead believe that labour market attachment is the same across genders, they will offer the same labour contracts to male and female workers. Then, the efficient intra-household allocation of labour will not be related to gender. It is statistical discrimination that determines gender differentials in the first type of equilibrium. Given that firms may use gender as a screening device, discrimination actually reduces the incentive problem for firms, eliminating adverse selection. Additionally, our model predicts that, in equilibria with female discrimination, gender earning gaps should be higher in industries/occupations in which the incentive problem is more severe. We use Census data for the year 2000 to show that this is the case.

Suggested Citation

  • Olivetti, Claudia & Albanesi, Stefania, 2005. "Home Production, Market Production and the Gender Wage Gap: Incentives and Expectations," CEPR Discussion Papers 4984, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4984
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP4984
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Benhabib, Jess & Rogerson, Richard & Wright, Randall, 1991. "Homework in Macroeconomics: Household Production and Aggregate Fluctuations," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1166-1187, December.
    2. Bruno Jullien & Bernard Salanié & François Salanié, 2000. "Screening Risk-Averse Agents Under Moral Hazard," Working Papers 2000-41, Center for Research in Economics and Statistics.
    3. Francois, Patrick, 1998. "Gender discrimination without gender difference: theory and policy responses," Journal of Public Economics, Elsevier, vol. 68(1), pages 1-32, April.
    4. Goldin, Claudia, 1992. "Understanding the Gender Gap: An Economic History of American Women," OUP Catalogue, Oxford University Press, number 9780195072709.
    5. Claudia Olivetti & Stefania Albanesi, 2005. "Home Production, Market Production and the Gender Wage Gap: Incentives and Expectations," Boston University - Department of Economics - Working Papers Series WP2005-013, Boston University - Department of Economics.
    6. Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2005. "Engines of Liberation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 109-133.
    7. Jeremy Greenwood & Nezih Guner, 2009. "Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households," NBER Chapters, in: NBER Macroeconomics Annual 2008, Volume 23, pages 231-276, National Bureau of Economic Research, Inc.
    8. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    9. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
    10. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 33-58, January.
    11. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    12. Goldin, Claudia, 1986. "Monitoring Costs and Occupational Segregation by Sex: A Historical Analysis," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 1-27, January.
    13. MacLeod, W Bentley & Malcomson, James M, 1988. "Reputation and Hierarchy in Dynamic Models of Employment," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 832-854, August.
    14. Bergstrom, Theodore C., 1993. "A survey of theories of the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 2, pages 21-79, Elsevier.
    15. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-347, June.
    16. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    17. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
    18. Robert Gibbons & Michael Waldman, 1999. "A Theory of Wage and Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1321-1358.
    19. William Bentley MacLeod & Daniel Parent, 1998. "Job Characteristics and the Form of Compensation," CIRANO Working Papers 98s-08, CIRANO.
    20. Light, Audrey & Ureta, Manuelita, 1992. "Panel Estimates of Male and Female Job Turnover Behavior: Can Female Nonquitters Be Identified?," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 156-181, April.
    21. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    22. June O'Neill, 2003. "The Gender Gap in Wages, circa 2000," American Economic Review, American Economic Association, vol. 93(2), pages 309-314, May.
    23. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefania Albanesi & Claudia Olivetti, 2009. "Production, Market Production and the Gender Wage Gap: Incentives and Expectations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 80-107, January.
    2. Stefania Albanesi & Claudia Olivetti, 2006. "Gender roles and technological progress," 2006 Meeting Papers 411, Society for Economic Dynamics.
    3. Knowles, John, 2007. "Why Are Married Men Working So Much? Home Production, Household Bargaining and Per-Capita Hours," IZA Discussion Papers 2909, Institute of Labor Economics (IZA).
    4. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    5. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    6. Solomon W. Polachek & Jun Xiang, 2009. "The Gender Pay Gap across Countries: A Human Capital Approach," SOEPpapers on Multidisciplinary Panel Data Research 227, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Bjerk, David & Han, Seungjin, 2007. "Assortative marriage and the effects of government homecare subsidy programs on gender wage and participation inequality," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1135-1150, June.
    8. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    9. Sara de la Rica & Juan José Dolado & Cecilia García-Peñalosa, 2008. "On gender gaps and self-fulfilling expectations: Theory, policies and some empirical evidence," Working Papers 2008-24, FEDEA.
    10. Hanno Lustig, "undated". "The Wealth-Consumption Ratio: A Litmus Test for Consumption-based Asset Pricing Models," UCLA Economics Online Papers 420, UCLA Department of Economics.
    11. Stefania Albanesi & Claudia Olivetti, 2016. "Gender Roles and Medical Progress," Journal of Political Economy, University of Chicago Press, vol. 124(3), pages 650-695.
    12. Francois, Patrick, 1998. "Gender discrimination without gender difference: theory and policy responses," Journal of Public Economics, Elsevier, vol. 68(1), pages 1-32, April.
    13. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS
    14. Iyigun, Murat & Walsh, Randall P., 2007. "Endogenous gender power, household labor supply and the demographic transition," Journal of Development Economics, Elsevier, vol. 82(1), pages 138-155, January.
    15. Sayyid Salman Rizavi & Catherine Sofer, 2010. "Household Division of Labor : Is There Any Escape From Traditional Gender Roles ?," Post-Print halshs-00461494, HAL.
    16. Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
    17. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    18. Elul, Ronel & Silva-Reus, Jose & Volij, Oscar, 2002. "Will you marry me?: A perspective on the gender gap," Journal of Economic Behavior & Organization, Elsevier, vol. 49(4), pages 549-572, December.
    19. Zvi Eckstein & Osnat Lifshitz, 2011. "Dynamic Female Labor Supply," Econometrica, Econometric Society, vol. 79(6), pages 1675-1726, November.
    20. Zvi Eckstein & Osnat Lifshitz, 2015. "Household Interaction And The Labor Supply Of Married Women," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(2), pages 427-455, May.
    21. Joyce Burnette, 2012. "Testing for Wage Discrimination in U.S. Manufacturing," Working Papers 12-23, Center for Economic Studies, U.S. Census Bureau.
    22. Gillian Hamilton & Aloysius Siow, 2007. "Class, Gender and Marriage," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 549-575, October.

    More about this item

    Keywords

    Labour contracts; Gender wage gaps; Incentives; Private information;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:4984. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.