Assortative Marriage and the Effects of Government Homecare Subsidy Programs on Gender Wage and Participation Inequality
McMaster University - Department of Economics
Claremont Colleges - Robert Day School of Economics and Finance; Institute for the Study of Labor (IZA)
December 24, 2006
Journal of Public Economics, Vol. 91, Nos. 5-6, 2007
We develop a model of the labor market where firms incur an adjustment cost when one of their workers quits, and males and females form households assortatively by skill. We show how this environment can lead to an economy where females earn less and drop out more frequently than equally skilled males in equilibrium, even when males and females constitute ex-ante identical populations. We then examine how different government homecare subsidy schemes may affect such gender inequality in the labor market. We show that the effect of government homecare subsidy schemes on gender inequality depends crucially on the form in which the subsidy is given and to whom it is allocated.
Number of Pages in PDF File: 20
Keywords: Gender Inequality, Discrimination, Subsidized Childcare
JEL Classification: H42, H24, J71, J16, J13Accepted Paper Series
Date posted: September 26, 2008
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