Assortative Marriage and the Effects of Government Homecare Subsidy Programs on Gender Wage and Participation Inequality
20 Pages Posted: 26 Sep 2008
Date Written: December 24, 2006
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.
Keywords: Gender Inequality, Discrimination, Subsidized Childcare
JEL Classification: H42, H24, J71, J16, J13
Suggested Citation: Suggested Citation