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Article

The Economics of Gender and Educational Achievement: Stylized Facts and Causal Evidence  

Judith M. Delaney and Paul J. Devereux

There are two well-established gender gaps in education. First, females tend to have higher educational attainment and achievement than males, and this is particularly the case for children from less advantaged backgrounds. Second, there are large differences in the fields of specialization chosen by males and females in college and even prior to college, and females disproportionately enter less highly paid fields. Gender differences in noncognitive traits, behavior, and interests have been shown to relate to differences in educational outcomes; however, this evidence cannot generally be given a causal interpretation. In contrast, the literature has been creative in estimating causal impacts of a wide range of factors using experimental and quasiexperimental variation. While the approaches are compelling, the findings vary widely across studies and are often contradictory. This may partly reflect methodological differences across studies, but it also may result from substantial true heterogeneity across educational systems and time periods. Lower educational achievement of males has been linked to gender differences in attitudes, behaviors, and educational aspirations as well as the tendency of males to mature at older ages. Differential field choices by gender are related to differences in comparative advantage by gender and gender differences in preferences for types of study and work and for nonpecuniary aspects of jobs, such as their flexibility and gender mix. There are reasons to believe that policy should address the two gender gaps, and many possible policy approaches exist. However, their effectiveness is unclear, and there is scope for further work to determine which policies are likely to be effective and in which circumstances.

Article

Explaining the Mathematics Gender Gap: The Role of Stereotypes  

Pilar Cuevas Ruiz, Ismael Sanz, and Almudena Sevilla

Descriptive stereotypes such as “girls are not good at mathematics” or prescriptive stereotypes, that is, fixed views about women’s societal roles, can explain the persistent gender gap in mathematics. Stereotypes lower girls’ beliefs, expectations, and incentives to put forth effort, and can constrain girls’ choices in male-dominated high-paying careers that are math-intensive and that require strong math skills. This gap slows progress toward gender equality in the labor market and hinders productivity and economic growth. Policy interventions to alleviate the negative impacts of descriptive stereotypes aim to prevent girls from internalizing socially constructed behaviors aligned with prevalent gender stereotypes regarding the innate mathematical abilities of boys and girls. Boosting girls’ confidence in their math skills includes introducing them to female role models, such as women math teachers, using gender-neutral language, and providing textbooks and other teaching materials that challenge gender stereotypes. A different set of policies focuses on altering the environment in which girls learn, rather than modifying their beliefs. By adjusting the testing methods (such as reducing the level of competition) or adapting the instructional approach to better align with the learning style of girls, it is possible to create an environment that enables more girls to achieve their maximum potential and to accurately assess their math abilities and interests, rather than simply their test-taking or classroom performance. However, interventions that aim to modify the beliefs and attitudes of girls and women ex post, as well as those that seek to alter the environment, may not work in the long term because they reinforce preexisting stereotypes and operate within the constraints of those stereotypes. For instance, while modifying the testing environment may result in higher grades for girls, it may not necessarily alter the perception that girls are incapable of excelling in math. In some cases, these interventions may even have negative consequences. Encouraging girls to “lean in” and behave like boys, for example, can lead to unequal, unjust, and inefficient outcomes because the benefits (economic returns) of doing so are lower or even negative for girls in light of existing gender stereotypes. One popular and affordable approach to combating gender stereotypes involves addressing (unconscious) biases among teachers, parents, and peers through initiatives such as unconscious bias training and self-reflection on biases. The underlying premise is that by increasing awareness of their own (unconscious) biases, individuals will engage their more conscious, non-gender-stereotypical thinking processes. However, such behavioral interventions can sometimes have unintended consequences and result in backlash, and their effectiveness may vary significantly depending on the context, so that their external validity is often called into question. The recognition of the adaptable nature of both conscious and unconscious stereotypes has led to progress in economics, with the development of social learning and information-based theories. Interventions resulting from these models can effectively counteract prescriptive stereotypes that limit girls’ education to certain fields based on societal expectations of gender roles. However, prescriptive gender stereotypes are often based on biased beliefs about the innate abilities of girls and women. Overcoming deeply ingrained descriptive stereotypes about innate abilities of boys and girls is a fruitful avenue for future economics research and can help close the gender performance gap in mathematics.

Article

Monopsony Power, Race, and Gender  

Aida Farmand and Teresa Ghilarducci

Most monopsony research leaves out the employer as an active agent. The cause of monopsony rests solely on the workers: Their idiosyncratic preferences, their lack of information, and their geographical isolation create the monopsony conditions. Employers are viewed as mainly passive and only choose to exploit their monopsony potential when the conditions allow. The theoretical passivity of employers leaves out a whole class of behaviors necessary to identify and understand the persistence of monopsony. For instance, the models consider gender as a monopsony factor because wives and mothers are presumed to have intensely inelastic labor supply functions. Women’s attachment to children and the children’s schools and to their husband’s locational decisions means women are less likely to leave a geographical area to pursue a competitor’s better offer. Again, it is the woman’s idiosyncratic choices that allow for monopsony exploitation. However, it is likely employers consciously use race and gender stratification to segregate and divide workers to create differential labor supply elasticities and, thus, create monopsony conditions to the firm. A firm would maintain practices that use race to allocate jobs and separate men from women workers to maintain divisions among the workforce. Moreover, government policies that make it difficult for workers to unionize, keep minimum wages low, and subsidize low-paid work through the earned income tax credit help employers create and maintain monopsony power among subaltern groups, nonwhite workers, and women. Future research on monopsony should focus on specific employers’ practices that create monopsony conditions such as providing firm specific childcare, perpetuating occupational segregations, limiting opportunities of promotion for women and nonwhite workers, and lobbying for the wage subsidy programs such as the earned income tax credit.

Article

Missing Women: A Review of Underlying Causes and Policy Responses  

Aparajita Dasgupta and Anisha Sharma

One of the most egregious manifestations of gender bias is the phenomenon of “missing women.” The number of missing women is projected to increase to 150 million by 2035, as a result of prenatal sex selection and excess female mortality relative to men, and is reflected in male-biased sex ratios at all ages. The economics literature identifies several proximate causes of the deficit of females, including the widespread use of prenatal sex selection in many Asian countries, which has been fueled by the diffusion of ultrasound and other fetal sex-detection technology. The use of prenatal sex selection has become even more expansive with a decline in fertility, as parents with a preference for sons are less likely to achieve their desired sex composition of children at lower levels of fertility. Gender discrimination in investments in health and nutrition also leads to excess female mortality among children through multiple channels. The deeper causes of son preference lie in the socioeconomic and cultural norms embedded in patriarchal societies, and recent literature in economics seeks to quantify the impact of these norms and customs on the sex ratio. Particularly important are the norms of patrilineality, in which property and assets are passed through the male line, and patrilocality, in which elderly parents coreside with their sons, whereas their daughters move to live with their husbands’ families after marriage. Another strand of the literature explores the hypothesis that the devaluing of women has roots in historical agricultural systems: Societies that have made little use of women’s labor are today the ones with the largest female deficits. Finally, economic development is often associated with a decline in son preference, but, in practice, many correlates of development, such as women’s education, income, and work status, have little impact on the sex ratio unless accompanied by more extensive social transformations. A number of policies have been implemented by governments throughout the world to tackle this issue, including legislative bans on different forms of gender discrimination, financial incentives for families to compensate them for the perceived additional costs of having a daughter, and media and advocacy campaigns that seek to increase the inherent demand for daughters by shifting the norm of son preference. Quantitative evaluations of some of these policies find mixed results. Where policies are unable to address the root causes of son preference, they often simply deflect discrimination from the targeted margin to another margin, and in some cases, they even fail in their core objectives. On the other hand, the expansion of social safety nets has had a considerable impact in reducing the reliance of parents on their sons. Similarly, media and advocacy campaigns that aim to increase the perceived value of women have also shown promise, even if their progress appears slow. Analysis of the welfare consequences of such interventions suggests that governments must pay close attention to underlying sociocultural norms when designing policy.

Article

Religiosity and Development  

Jeanet Sinding Bentzen

Economics of religion is the application of economic methods to the study of causes and consequences of religion. Ever since Max Weber set forth his theory of the Protestant ethic, social scientists have compared socioeconomic differences across Protestants and Catholics, Muslims, and Christians, and more recently across different intensities of religiosity. Religiosity refers to an individual’s degree of religious attendance and strength of beliefs. Religiosity rises with a growing demand for religion resulting from adversity and insecurity or a surging supply of religion stemming from increasing numbers of religious organizations, for instance. Religiosity has fallen in some Western countries since the mid-20th century, but has strengthened in several other societies around the world. Religion is a multidimensional concept, and religiosity has multiple impacts on socioeconomic outcomes, depending on the dimension observed. Religion covers public religious activities such as church attendance, which involves exposure to religious doctrines and to fellow believers, potentially strengthening social capital and trust among believers. Religious doctrines teach belief in supernatural beings, but also social views on hard work, refraining from deviant activities, and adherence to traditional norms. These norms and social views are sometimes orthogonal to the general tendency of modernization, and religion may contribute to the rising polarization on social issues regarding abortion, LGBT rights, women, and immigration. These norms and social views are again potentially in conflict with science and innovation, incentivizing some religious authorities to curb scientific progress. Further, religion encompasses private religious activities such as prayer and the particular religious beliefs, which may provide comfort and buffering against stressful events. At the same time, rulers may exploit the existence of belief in higher powers for political purposes. Empirical research supports these predictions. Consequences of higher religiosity include more emphasis on traditional values such as traditional gender norms and attitudes against homosexuality, lower rates of technical education, restrictions on science and democracy, rising polarization and conflict, and lower average incomes. Positive consequences of religiosity include improved health and depression rates, crime reduction, increased happiness, higher prosociality among believers, and consumption and well-being levels that are less sensitive to shocks.

Article

Maternity Leave and Paternity Leave: Evidence on the Economic Impact of Legislative Changes in High-Income Countries  

Serena Canaan, Anne Sophie Lassen, Philip Rosenbaum, and Herdis Steingrimsdottir

Labor market policies for expecting and new mothers emerged at the turn of the 19th century. The main motivation for these policies was to ensure the health of mothers and their newborn children. With increased female labor market participation, the focus has gradually shifted to the effects that parental leave policies have on women’s labor market outcomes and gender equality. Proponents of extending parental leave rights for mothers in terms of duration, benefits, and job protection have argued that this will support mothers’ labor market attachment and allow them to take time off from work after childbirth and then safely return to their pre-birth jobs. Others have noted that extended maternity leave can work as a double-edged sword for mothers: If young women are likely to spend months, or even years, on leave, employers are likely to take that into consideration when hiring and promoting their employees. These policies may therefore end up adversely affecting women’s labor market outcomes. This has led to an increased focus on activating fathers to take parental leave, and in 2019, the European Parliament approved a directive requiring member states to ensure at least 2 months of earmarked paternity leave. The literature on parental leave has proliferated during the past two decades. The increased number of studies on the topic has brought forth some consistent findings. First, the introduction of short maternity leave is beneficial for both maternal and child health and for mothers’ labor market outcomes. Second, there appear to be negligible benefits from a leave extending beyond 6 months in terms of health outcomes and children’s long-term outcomes. Furthermore, longer leaves have little, or even adverse, influence on mothers’ labor market outcomes. However, evidence suggests that there may be underlying heterogeneous effects from extended leave among different socioeconomic groups. The literature on the effect of earmarked paternity leave indicates that these policies are effective in increasing fathers’ leave-taking and involvement in child care. However, the evidence on the influence of paternity leave on gender equality in the labor market remains scarce and is somewhat mixed. Finally, recent studies that focus on the effect of parental leave policies for firms find that in general, firms are able to compensate for lost labor when their employees go on leave. However, if firms face constraints when replacing employees, it could negatively influence their performance.

Article

Trade Shocks and Labor-Market Adjustment  

John McLaren

When international trade increases, either because of a country’s lowering its trade barriers, a trade agreement, or productivity surges in a trade partner, the surge of imports can cause dislocation and lowered incomes for workers in the import-competing industry or the surrounding local economy. Trade economists long used static approaches to analyze these effects on workers, assuming either that workers can adjust instantly and costlessly, or (less often) that they cannot adjust at all. In practice, however, workers incur costs to adjust, and the adjustment takes time. An explosion of research, mostly since about 2008, has explored dynamic worker adjustment through change of industry, change of occupation, change of location, change of labor-force participation, adjustment to change in income, and change in marital status or family structure. Some of these studies estimate rich structural models of worker behavior, allowing for such factors as sector-specific or occupation-specific human capital to accrue over time, which can be imperfectly transferable across industries or occupations. Some allow for unobserved heterogeneity across workers, which creates substantial technical challenges. Some allow for life-cycle effects, where adjustment costs vary with age, and others allow adjustment costs to vary by gender. Others simplify the worker’s problem to embed it in a rich general equilibrium framework. Some key results include: (a) Switching either industry or occupation tends to be very costly; usually more than a year’s average wages on average. (b) Given that moving costs change over time and workers are able to time their moves, realized costs are much lower, but the result is gradual adjustment, with a move to a new steady state that typically takes several years. (c) Idiosyncratic shocks to moving costs are quantitatively important, so that otherwise-identical workers often are seen moving in opposite directions at the same time. These shocks create a large role for option value, so that even if real wages in an industry are permanently lowered by a trade shock, a worker initially in that industry can benefit. This softens or reverses estimates of worker losses from, for example, the China shock. (d) Switching costs vary greatly by occupation, and can be very different for blue-collar and white-collar workers, for young and old workers, and for men and women. (e) Simple theories suggest that a shock results in wage overshooting, where the gap in wages between highly affected industries and others opens up and then shrinks over time, but evidence from Brazil shows that at least in some cases the wage differentials widen over time. (f) Some workers adjust through family changes. Evidence from Denmark shows that some women workers hit by import shocks withdraw from the labor market at least temporarily to marry and have children, unlike men. Promising directions at the frontier include more work on longitudinal data; the role of capital adjustment; savings, risk aversion and the adjustment of trade deficits; responses in educational attainment; and much more exploration of the effects on family.

Article

The Macroeconomics of Stratification  

Stephanie Seguino

Stratification economics, which has emerged as a new subfield of research on inequality, is distinguished by a system-level analysis. It explores the role of power in influencing the processes and institutions that produce hierarchical economic and social orderings based on ascriptive characteristics. Macroeconomic factors play a role in buttressing stratification, especially by race and gender. Among the macroeconomic policy levers that produce and perpetuate intergroup inequality are monetary policy, fiscal expenditures, exchange rate policy, industrial policy, and trade, investment, and financial policies. These policies interact with a stratification “infrastructure,” comprised of racial and gender ideologies, norms, and stereotypes that are internalized at the individual level and act as a “stealth” factor in reproducing hierarchies. In stratified societies, racial and gender norms and stereotypes act to justify various forms of exclusion from prized economic assets such as good jobs. For example, gendered and racial stereotypes contribute to job segregation, with subordinated groups largely sequestered in the secondary labor market where wages are low and jobs are insecure. The net effect is that subordinated groups serve as shock absorbers that insulate members of the dominant group from the impact of negative macroeconomic phenomena such as unemployment and economic volatility. Further, racial and gender inequality have economy-wide effects, and play a role in determining the rate of economic growth and overall performance of an economy. The impact of intergroup inequality on macro-level outcomes depends on a country’s economic structure. While under some conditions, intergroup inequality acts as a stimulus to economic growth, under other conditions, it undermines societal well-being. Countries are not locked into a path whereby inequality has a positive or negative effect on growth. Rather, through their policy decisions, countries can choose the low road (stratification) or the high road (intergroup inequality). Thus, even if intergroup inequality has been a stimulus to growth in the past, it is possible to choose an equity-led growth path.

Article

A Review of the Effects of Pay Transparency  

Emma Duchini, Stefania Simion, and Arthur Turrell

An increasing number of countries have introduced pay transparency policies with the aim of reducing gender inequality in the labor market. Firms subject to transparency requirements must disclose publicly or to employees’ representatives information on their employees’ pay broken down by gender, or indicators of gender gaps in pay and career outcomes. The argument at the base of these policies is that gender inequality may in part persist because it is hidden. On the one hand, employers rarely keep track of employees’ pay and career progression by gender, and, on the other hand, employees rarely engage in conversations with their colleagues about pay. The lack of information on within-firm disparities by gender may therefore hamper progress toward a more egalitarian labor market. Transparency policies have the potential to improve women’s relative pay and career outcomes for two reasons. First, by increasing the salience of gender gaps in the labor market, they can alter the relative bargaining power of male and female employees vis-à-vis the firm and lead lower-paid individuals to demand higher pay from their employer. Second, together with pressures from employees, the public availability of information on firms’ gender-equality performance may also increase public pressure for firms’ action in this domain. A clear message emerges from the literature analyzing the impact of pay transparency policies on gender inequality: these policies are effective at pushing firms to reduce their gender pay gaps, although this is achieved via a slowdown of men’s wage growth. Related results point to a reduction in labor productivity following the introduction of transparency mandates but no detrimental effect on firms’ profits because this effect is compensated by the reduction in labor costs. Overall, the findings in this literature suggest that transparency policies can reduce the gender pay gap with limited costs for firms but may not be suited to achieve the objective of improving outcomes for lower-paid employees.

Article

What Drives HIV in Africa? Addressing Economic Gender Inequalities to Close the HIV Gender Gap  

Aurélia Lépine, Henry Cust, and Carole Treibich

Ending HIV as a public health threat by 2030 presents challenges significantly different to those of the past 40 years. Initially perceived as a disease affecting gay men, today, HIV disproportionately affects adolescents and young women in Africa. Current strategies to prevent HIV mostly rely on using biomedical interventions to reduce the risk of infection during risky sex and to address that biologically; women are more vulnerable to HIV infection than men. Ongoing policies and strategies to end the AIDS epidemic in Africa are likely to fail if implemented alone, given they fail to address why vulnerable young women engage in risky sexual behaviors. Evidence strongly suggests economic vulnerability, rather than income level, is a primary driver of women's decision to engage in commercial and transactional sex. By viewing HIV through the lens of structural gender inequality, poverty, and use of risky sexual behaviors to cope with economic shocks, a new explanation for the HIV gender gap emerges. New and promising approaches to reduce HIV acquisition and transmission by protecting women from economic shocks and increasing their ability to participate in the economy have proven effective. Such interventions are vital to break the pattern of unequal HIV transmission against women and if HIV is to be beaten.

Article

Guilds and the Economy  

Sheilagh Ogilvie

Guilds ruled many European crafts and trades from the Middle Ages to the Industrial Revolution. Each guild regulated entry to its occupation, requiring any practitioner to become a guild member and then limiting admission to the guild. Guilds intervened in the markets for their members’ products, striving to keep prices high, limit output, suppress competition, and block innovations that might disrupt the status quo. Guilds also acted in input markets, seeking to control access to raw materials, keep wages low, hinder employers from competing for workers, and prevent workers from agitating for better conditions. Guilds treated women particularly severely, usually excluding them from apprenticeship and forbidding any female other than a guild member’s widow from running a workshop. Guilds invested large sums in lobbying governments and political elites to grant, maintain, and extend these privileges. Guilds had the potential to compensate for their cartelistic activities by creating countervailing benefits. Guild quality certification was one possible solution to information asymmetries between producers and consumers, which could have made markets work better. Guild apprenticeship had the potential to solve imperfections in markets for skilled training, and thus to encourage human capital investment. The cartel profits generated by guilds could in theory have encouraged technological innovation by enabling guild masters to appropriate more of the social benefits of their innovations, while guild journeymanship and spatial clustering could diffuse new technical knowledge. A rich scholarship on European guilds makes it possible to assess the degree to which guilds created such benefits, outweighing the harm they caused. After about 1500, guild strength diverged across Europe, declining gradually in Flanders, the Netherlands, and England, surviving in France and Italy, and intensifying across large tracts of Iberia, Scandinavia, and the German-speaking lands. The activities of guilds contributed to variations across Europe in economic performance, urban growth, and inequality. Guilds interacted significantly with both markets and states, which helps explain why European economies diverged in the crucial centuries before industrialization.

Article

A Review of Gender Differences in Negotiation  

Iñigo Hernandez-Arenaz and Nagore Iriberri

Gender differences, both in entering negotiations and when negotiating, have been proved to exist: Men are usually more likely to enter into negotiation than women and when negotiating they obtain better deals than women. These gender differences help to explain the gender gap in wages, as starting salaries and wage increases or promotions throughout an individual’s career are often the result of bilateral negotiations. This article presents an overview of the literature on gender differences in negotiation. The article is organized in four main parts. The first section reviews the findings with respect to gender differences in the likelihood of engaging in a negotiation, that is, in deciding to start a negotiation. The second section discusses research on gender differences during negotiations, that is, while bargaining. The third section looks at the relevant psychological literature and discusses meta-analyses, looking for factors that trigger or moderate gender differences in negotiation, such as structural ambiguity and cultural traits. The fourth section presents a brief overview of research on gender differences in non- cognitive traits, such as risk and social preferences, confidence, and taste for competition, and their impact in explaining gender differences in bargaining. Finally, the fifth section discusses some policy implications. An understanding of when gender differences are likely to arise on entering into negotiations and when negotiating will enable policies to be created that can mitigate current gender differences in negotiations. This is an active, promising research line.