Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect

van Ours, Jan C.; Francois, Patrick

doi:10.2139/ssrn.252007

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Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect

42 Pages Posted: 15 Apr 2001

See all articles by Jan C. van Ours

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Patrick Francois

University of British Columbia (UBC) - Department of Economics

There are 2 versions of this paper

Date Written: September 2000

Abstract

We present a theoretical explanation of the gender wage gap which turns on the interaction between men and women in households. In equilibria where men are over-represented in full-time work, we show that firms rationally choose to hire women only at strictly lower wages than men. The model developed predicts a gap even controlling for education, occupation and industry of workers and does so in a competitive labor market where there exist no inherent gender differences. We test our theory using CPS data over the period 1979-98 and find it is strongly supported by the data.

Keywords: Gender discrimination, household models, wage gap

JEL Classification: J71, J41, J16

Suggested Citation: Suggested Citation

van Ours, Jan C. and Francois, Patrick, Gender Wage Differentials in a Competitive Labor Market: The Household Interaction Effect (September 2000). Available at SSRN: https://ssrn.com/abstract=252007 or http://dx.doi.org/10.2139/ssrn.252007