Keywords: statistical discrimination, taste-based discrimination, active labor market policies
JEL codes: J7, J31
Abstract
This paper analyzes the demand based causes of gender discrimination in the labor market and it aims to explain the currently existing gender gaps in terms of labor market participation and lab or income. I propose a formal model to analyze the gender discrimination that individuals face at work due to statistical discrimination and taste-based discrimination. I study the effects of discrimination on the lab or market participation, income, and utility distributions and compare these effects between the female and male sectors of the society. I show that the conditions that dissipate the gender gaps are also good to improve efficiency. However, in order to reach a first best it is necessary to eliminate all kinds of gender related idiosyncratic preferences that are based on stereotypes and conscious and unconscious biases.
