Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect

42 Pages Posted: 15 Apr 2001

See all articles by Jan C. van Ours

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Patrick Francois

University of British Columbia (UBC) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2000

Abstract

We present a theoretical explanation of the gender wage gap which turns on the interaction between men and women in households. In equilibria where men are over-represented in full-time work, we show that firms rationally choose to hire women only at strictly lower wages than men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labor market where there exist no inherent gender differences. We test our theory using CPS data over the period 1979-98 and find it is strongly supported by the data.

Keywords: Gender discrimination, household models, wage gap

JEL Classification: J71, J41, J16

Suggested Citation

van Ours, Jan C. and Francois, Patrick, Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect (September 2000). IZA Discussion Paper No. 202. Available at SSRN: https://ssrn.com/abstract=252007

Jan C. Van Ours (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2880 (Phone)
+31 13 466 3042 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

Patrick Francois

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

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