Economic Consequences of Gender Identity

By Bertrand, Marianne | NBER Reporter, Summer 2014 | Go to article overview

Economic Consequences of Gender Identity


Bertrand, Marianne, NBER Reporter


An increasingly discussed explanation for why women and men experience different labor markets is the existence and persistence of gender identity norms. Influential research by George Akerlof and Rachel Kranton (1) has imported into economics insights from social psychology regarding an individual's social identity and how it can influence behaviors and choices. These researchers define identity as one's sense of belonging to one or multiple social categories. One's identity encompasses a clear view about how people who belong to that category should behave. In their model, identity directly enters the utility function: identity influences economic outcomes because deviating from the behavior that is expected for one's social category is assumed to decrease utility. Hence, people's economic actions can in part be explained by a desire to conform with their sense of self. Akerlof and Kranton apply their model to the concept of gender identity. In this case, the two relevant social categories are those of "man" and "woman," and these two categories are associated with specific behavioral prescriptions which, if violated, will decrease utility.

Gender identity norms may help to explain why occupational segregation by gender has been slow to disappear. Women may feel discomfort entering certain professions, and men may feel discomfort if women enter these professions if the professions are strongly "gendered" (for example, only men, not women, are bankers). This is related to Claudia Goldin's pollution theory of discrimination, (2) which also assumes that men derive utility from their work not just because of the wage they earn but also because of how their image is affected by where they work and with whom they work. In Goldin's model, men want to keep women away from certain jobs because broad female participation in those jobs would reduce the prestige men obtain from working in them. The reduction in prestige in Goldin's case is driven by the signals that might be sent to outsiders about the qualifications required to perform these jobs if too many women enter them. In other words, Goldin's model is closer to a statistical discrimination model while Akerlof and Kranton's is more directly reminiscent of a taste-based discrimination model.

Another application is women's labor force participation. As long as there is a strong behavioral prescription indicating that "men work in the labor force and women work in the home," gender identity norms could explain why women have been slow to increase their labor force participation. Nicole Fortin uses data from the World Values Surveys to assess how women's sense of self relates to their labor force participation in a sample of OECD countries. (3) She shows that the social representation of women as homemakers and men as breadwinners appears quite predictive of women's labor force participation across countries. Fortin reexamines a similar question in a single country, the United States, over a longer time period (1977 to 2006). (4) A more central motivation in this particular paper is to provide an explanation for the slowdown in the closing of the gender gap in labor force participation in the United States since the mid-1990s (see for example Francine Blau and Charles Kahn (5)). Fortin shows that the evolution of gender role attitudes over time appears to map well with the evolution of female labor force participation. Women's gender role attitudes steadily became less traditional, with more and more women disagreeing with the notion that husbands should be the breadwinners and wives should be the homemakers, and more egalitarian, with more and more women agreeing with the notion that they are as capable as men in the workforce, until the mid-1990s when these trends reversed. Raquel Fernandez and Alessandra Fogli study the labor force participation of second-generation American women. (6) They use past values of female labor force participation in these women's country of ancestry as cultural proxies for gender identity norms. …

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