Home Production, Market Production and the Gender Wage Gap: Incentives and Expectations

51 Pages Posted: 25 May 2006 Last revised: 14 Jul 2009

See all articles by Stefania Albanesi

Stefania Albanesi

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Claudia Olivetti

Boston College; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2006

Abstract

The purpose of this paper is to study the joint determination of gender differentials in labor market outcomes and in the household division of labor. Specifically, we explore the hypothesis that incentive problems in the labor market amplify differences in earnings due to gender differentials in home hours. In turn, earnings differentials reinforce the division of labor within the household, leading to a potentially self-fulfilling feedback mechanism. The workings of the labor market are key in our story. The main assumptions are that the utility cost of work effort is increasing in home hours, and that higher effort should correspond to higher incentive pay. Household decisions are Pareto efficient, leading to a negative correlation between relative home hours and earnings across spouses. We use the Census and the PSID to study these predictions and find that they are supported by the data.

Suggested Citation

Albanesi, Stefania and Olivetti, Claudia, Home Production, Market Production and the Gender Wage Gap: Incentives and Expectations (May 2006). NBER Working Paper No. w12212. Available at SSRN: https://ssrn.com/abstract=902564

Stefania Albanesi (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

HOME PAGE: http://www.columbia.edu/~sa2310/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Claudia Olivetti

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
34
Abstract Views
619
PlumX Metrics