Gender Complementarities in the Labor Market

34 Pages Posted: 27 Jul 2013

See all articles by Giacomo De Giorgi

Giacomo De Giorgi

University College London; NBER; Federal Reserve Banks - Federal Reserve Bank of New York

Marco Paccagnella

Bank of Italy

Michele Pellizzari

Organization for Economic Co-Operation and Development (OECD)

Date Written: June 21, 2013

Abstract

In this paper we estimate the short-run elasticity of substitution between male and female workers, using data on employment and wages from Italian provinces from 1993-2006. We adopt a production function approach similar to that of Card and Lemieux (2001a) and Acemoglu, Autor and Lyle (2004). Our identification strategy relies on a natural experiment. In 2000 the Italian parliament passed a law to abolish compulsory military service; the reform was implemented through a gradual reduction in the number of draftees, and compulsory drafting was definitively terminated in 2004. We use data on the (planned) maximum number of draftees at the national level (as stated in the annual budgetary law), interacted with sex-ratios at birth at the provincial level, as instruments for (relative) female labor supply. Our results suggest that young males and females are imperfect substitutes, with an elasticity of substitution ranging between 1.1 and 1.6. Our results have implications for the evaluation of policies aimed at increasing female labor market participation, suggesting that they do not necessarily displace male employment.

Keywords: J21, J31, J16

JEL Classification: gender complementarities, elasticity of substitution, employment, wages

Suggested Citation

De Giorgi, Giacomo and Paccagnella, Marco and Pellizzari, Michele, Gender Complementarities in the Labor Market (June 21, 2013). Bank of Italy Occasional Paper No. 183, Available at SSRN: https://ssrn.com/abstract=2298604 or http://dx.doi.org/10.2139/ssrn.2298604

Giacomo De Giorgi

University College London ( email )

Gower Street
London
United Kingdom

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Marco Paccagnella (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Michele Pellizzari

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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