The Armistice of the Sexes: Gender Complementarities in the Production Function

40 Pages Posted: 29 Jul 2019

See all articles by Raphael Espinoza

Raphael Espinoza

International Monetary Fund (IMF)

Jonathan D. Ostry

International Monetary Fund (IMF)

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department

Date Written: June 2019

Abstract

Macroeconomic models have largely ignored the importance of gender diversity by assuming that male and female workers are perfectly substitutable in the aggregate production function. Whether this assumption is valid is an empirical question that this paper aims to answer by estimating the elasticity of substitution (ES) between the two types of labor. We apply linear and non-linear techniques to cross-country data at the aggregate level, to cross-country data at the sectoral level, and to firm-level data for the manufacturing sector in China. We find that women and men are far from being perfect substitutes: the ES is below 1 for the aggregate sample, between 1-2 for the sectoral sample, and between 2-3 at firm-level. We discuss why the ES may vary at different levels of aggregation and conclude on the implications of these results for growth accounting and for the gains from gender equality.

Keywords: aggregate production function, elasticity of substitution, Female Labor Force Participation, growth

JEL Classification: J24, O47

Suggested Citation

Espinoza, Raphael and Ostry, Jonathan D. and Papageorgiou, Chris, The Armistice of the Sexes: Gender Complementarities in the Production Function (June 2019). CEPR Discussion Paper No. DP13792. Available at SSRN: https://ssrn.com/abstract=3428312

Raphael Espinoza (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jonathan D. Ostry

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
2
Abstract Views
35
PlumX Metrics