Gender Roles, Labour Market Signalling and Policy Design

Previous research shows that childbearing is one of the most important single factors behind the long-run gender wage gap between women and men. This research project focuses on one possible mechanism behind this relationship and examines whether incomplete information about parents’ gender norms can contribute to persistent gender differences in labour market outcomes. The project combines theoretical modelling with empirical analysis to shed light on this mechanism.

In the theoretical part, we model an economy consisting of “egalitarian” and “traditional” couples, where the division of household work affects individuals’ productivity. In egalitarian couples, household work is shared equally, whereas in traditional couples the woman takes primary responsibility. When employers cannot observe which household type a given couple belongs to, statistical discrimination arises: firms assume lower productivity for women because traditional households exist, and therefore offer lower wages to all women. This information asymmetry causes even egalitarian couples to act inefficiently, giving rise to self-fulfilling gender wage gaps.

A central part of the project is to analyse which signalling mechanisms could enable individuals to credibly communicate their household type and preferences to employers, and thereby potentially restore efficiency. One policy instrument that could potentially serve such a function is shared parental leave, where one parent’s use of leave correspondingly reduces the remaining entitlement of the other parent. After having a child, parents can signal their type to employers through how they divide parental leave between them. The empirical analysis uses Swedish register data that link parents and contain information on parental benefit uptake and labour market outcomes, in order to study whether and how this signalling affects women’s labour market careers under different parental leave regimes in Sweden.

Project leader

Martin Olsson

Other project participants

Andrea Ichino, Gilat Levy,  Barbara Petrongolo, and Cecilé Pierre