Abstract
Women consistently attain worse labor market outcomes than men do in terms of wages, participation rates, and unemployment. These differences have been further deepened by the economic crisis brought about by the current Covid-19 pandemic.
Recent literature emphasizes that (i), an important part of these gaps is due to wage discrimination by employers who exploit the fact that female workers are more willing to work in specific firms, possibly due to their location or other non-wage firm's characteristics; (ii), family decisions are the result of a bargaining process between the household members, whose preferences are the expression of the social norms to which they adhere.
In this project, we aim to study the role of the family in explaining the labor supply decisions of couples and their consequences on gender gaps. The challenge is that labor supply depends on intra-household bargaining positions, but bargaining positions themselves change with relative economic performance within the household.
To circumvent this endogeneity problem, we propose to use large macroeconomics shocks as quasi-natural experiments. The hypothesis is that significant changes in the economic conditions give us exogenous variation in the intra-household bargaining position that can affect the bargaining procedure itself.
In this research project, we aim: (i) to understand to which extent changes in how the firm competes for workers of each gender explain the evolution of gender gaps in the labor market along the economic cycle; (ii), to use these results to investigate how the intra-household decision process (as governed by social norms on gender roles in the family) changes due to the economic environment.
To do so, we will first develop a framework that allows us to establish a causal link between macroeconomic shocks and gender gaps in the labor market, leading to changes in the bargaining position within the household. We will then analyze how these changes in the bargaining position in the household, as instrumented by the economic cycle, affect household decisions.
Understanding the evolution of intra-household decisions is of great value for designing policies that aim to redefine the gender norms within the household. Since job losses in the Covid-19 pandemic have been particularly severe for women and women also took up most of the additional childcare chores imposed on families by the lockdown of kindergartens and schools, this crisis could erode decades of progress towards gender equality. Our project aims to provide guidance on how to revert this trend by designing policy interventions that can trigger a long-term change in social norms.
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