Allocation of Female Talent and Cross-Country Productivity Differences

Abstract

The disparities in cross-country labor productivity are greater in agriculture than in other industries. I propose that the misallocation of female talent across sectors distorts productivity. I formalize the theory by using a general equilibrium Roy model with gender-specific frictions. If female workers experience higher frictions in non-agricultural sectors, then unproductive female workers will select into agricultural sector. From a sample of 66 countries, I find that low-income countries have higher frictions in non-agricultural industries. By setting frictions to US levels, agricultural labor productivity increases by 16.6 percent and GDP per capita increases by 1.4 percent, primarily in low-income countries.

Keywords: misallocation, gender, occupational choice, productivity

JEL Classification: O11, O13, O47