Gender Gaps in the Labour Market and Economic Growth

Abstract

This paper studies the effects of policies aimed at mitigating discrimination against women in the marketplace on gender gaps in the labour market, unemployment and long‐run growth. The analysis uses a gender‐based overlapping generations model with labour market rigidities. Gender bias in the workplace varies inversely with the presence of skilled women (who operate as agents of change) in employment and has a direct impact on their bargaining power in the family. The model is calibrated for Morocco. Experiments show that although the growth effects of policies aimed at mitigating gender bias in the workplace are significant and are magnified through a stronger presence of skilled women in the labour market, a trade‐off may emerge with respect to female unemployment when they are combined with subsidies to women’s training. To mitigate this trade‐off, anti‐discrimination policies in the marketplace may need to be complemented by across‐the‐board measures aimed at reducing labour costs and raising productivity.