Social Subsidies and Marketization – The Role of Gender and Skill

55 Pages Posted: 11 May 2018

See all articles by Robert Duval-Hernandez

Robert Duval-Hernandez

World Bank

Lei Fang

Federal Reserve Bank of Atlanta

Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics; Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

Date Written: February 14, 2018

Abstract

This paper decomposes the differences in aggregate market hours between US and Europe across gender-skill groups and finds that low-skilled women are the biggest contributors to aggregate differences, with the exception of Nordic countries. We develop a model to account for the gender-skill differences in market hours across countries. Taxes, which reduce market hours in favor of leisure and home production, explain a substantial fraction of the differences in hours for Southern and Central European countries. Subsidized family care, which reduces home hours of women in favor of market hours, explains the different pattern of hours in Nordic countries. Low-skilled women are more responsive to policy because of their comparative advantage in producing home services and the corresponding market substitutes.

Keywords: Cross-Country Differences in Market Hours, Home Production, Subsidies on Family Care

JEL Classification: E24, E62, J22

Suggested Citation

Duval-Hernandez, Robert and Fang, Lei and Ngai, Liwa Rachel, Social Subsidies and Marketization – The Role of Gender and Skill (February 14, 2018). SOEPpaper No. 962. Available at SSRN: https://ssrn.com/abstract=3169794 or http://dx.doi.org/10.2139/ssrn.3169794

Robert Duval-Hernandez (Contact Author)

World Bank ( email )

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Lei Fang

Federal Reserve Bank of Atlanta ( email )

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Atlanta, GA 30309-4470
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Liwa Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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United Kingdom
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+44 207 831 1840 (Fax)

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

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Kowloon
Hong Kong

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