Why does the Schooling Gap Close while the Wage Gap Persists across Country Income Comparisons?

Abstract

Because the paid hours gap closes as the service sector becomes more pronounced for high-income countries. Although gender wage inequality persists across country income groups, differences in schooling years between females and males diminish. We assemble a novel dataset, calibrate a general equilibrium, multi-sector, -gender, and -production technology model, and show that gender-specific sectoral comparative advantages explain the schooling gap decline in high-income economies even when the wage gap persists. Due to these comparative advantages, relative female-to-male hours in paid work are greater in high-income countries, providing starker incentives for female education. We additionally show that accounting for consumption subsistence is essential to explain schooling differences in low-income countries. Our results suggest that the schooling gap decline and the de-invisibilisation of female paid work observed in high-income countries are linked by structural sector movements instead of wage inequality reductions.

Keywords: Development, Gender Gaps, Labor, Education, Structural Change

JEL Classification: I24, I25, J24, J16, O41