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Social Subsidies and Marketization: the role of gender and skill

Author

Listed:
  • Robert Duval-Hernandez

    (Economics Research Centre (CypERC) University of Cyprus
    Centro de Investigación y Docencia Económicas (CIDE)
    Institute of Labor Economics (IZA))

  • Lei Fang

    (Economic Research Department Federal Reserve Bank of Atlanta)

  • L. Rachel Ngai

    (Economics Department London School of Economics (LSE)
    Centre for Economic Policy Research (CEPR)
    Centre for Macroeconomics (CFM))

Abstract
This paper decomposes the differences in aggregate market hours between US and Europe across gender-skill groups and finds that low-skilled women are the biggest contributors to aggregate differences, with the exception of Nordic countries. We develop a model to account for the gender-skill differences in market hours across countries. Taxes, which reduce market hours in favor of leisure and home production, explain a substantial fraction of the differences in hours for Southern and Central European countries. Subsidized family care, which reduces home hours of women in favor of market hours, explains the different pattern of hours in Nordic countries. Low-skilled women are more responsive to policy because of their comparative advantage in producing home services and the corresponding market substitutes.

Suggested Citation

  • Robert Duval-Hernandez & Lei Fang & L. Rachel Ngai, 2018. "Social Subsidies and Marketization: the role of gender and skill," Discussion Papers 1804, Centre for Macroeconomics (CFM).
    • Handle: RePEc:cfm:wpaper:1804
    as

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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Cross-country differences in market hours; Home production; Subsidies on family care;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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