On gender gaps and self-fulfilling expectations: alternative implications of paid-for training Articles uri icon

publication date

  • July 2013

start page

  • 1829

end page

  • 1848

issue

  • 3

volume

  • 51

international standard serial number (ISSN)

  • 0095-2583

electronic international standard serial number (EISSN)

  • 1465-7295

abstract

  • This paper presents a model of self-fulfilling expectations by firms and households which generates multiplicity of equilibria in pay and housework time allocation for ex-ante identical spouses. Multiplicity arises from statistical discrimination exerted by firms in the provision of paid-for training to workers, rather than from incentive problems in the labor market. Employers' beliefs about differences in spouses' reactions to housework shocks lead to symmetric (ungendered) and asymmetric (gendered) equilibria. We find that: (1) the ungendered equilibrium tends to prevail as aggregate productivity in the economy increases (regardless of the generosity of family aid policies), (2) the ungendered equilibrium could yield higher welfare under some scenarios, and (3) gender-neutral job subsidies are more effective that gender-targeted ones in removing the gendered equilibrium. (JEL J16, J70, J71)