Gender Norms, Temporal Flexibility, and Talent Misallocation

Abstract: To what extent do unequal gender roles in the household affect aggregate outputs when there is temporal inflexibility in the labor market? Following Goldin (2014) and Erosa et al. (2022)'s narrative of how disproportionate rewards to long hours create a source of distortion in the labor market, we explore the aggregate effects of gender differences exacerbated by nonlinear wage structures through a static model calibrated on US labor force data. Features of our model are similar to that of Erosa et al. (2022)'s with a few key differences that allow for a more nuanced analysis regarding time allocation and intra-household resource allocation. We discover that aggregate market output and women's market output increases by 6.14% and 10.96%, respectively, when we eliminate gender norms in the baseline counterfactual analysis. Our analysis additionally concludes that gender norms would lead to talent misallocation only if there are differences in the nonlinearity of wages across occupations.