The labor gender gap: The effects of exogenous expense shocks on a person’s working hours, and the role of gender in this story

The Dutch minister of economic affairs announced that he is planning to increase full time work participation. He added that he wants to encourage women to work more hours. Aside from wage, concrete measured stayed out of the discussion. This thesis aims to explore the differences between genders, by introducing exogenous expense shocks into the equation. An instrumental variable approach will examine the effects of these shocks, and the differing results between genders will be compared. In short, this thesis finds that exogenous expense shocks do not play a significant role in the intensive labor margin of an individual. Furthermore, increasing wage will not help reducing the gap in working hours between men and women. As men respond more to financial incentives than women, the gender gap would only be increased. The composition of the household is the key explanatory variable to explaining the employment gap between men and women. When a woman finds a partner, they will work less...Show moreThe Dutch minister of economic affairs announced that he is planning to increase full time work participation. He added that he wants to encourage women to work more hours. Aside from wage, concrete measured stayed out of the discussion. This thesis aims to explore the differences between genders, by introducing exogenous expense shocks into the equation. An instrumental variable approach will examine the effects of these shocks, and the differing results between genders will be compared. In short, this thesis finds that exogenous expense shocks do not play a significant role in the intensive labor margin of an individual. Furthermore, increasing wage will not help reducing the gap in working hours between men and women. As men respond more to financial incentives than women, the gender gap would only be increased. The composition of the household is the key explanatory variable to explaining the employment gap between men and women. When a woman finds a partner, they will work less. When a man gives birth to a child, he will work more. These factors increase the gender gap regarding the number of working hours.Show less

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The labor gender gap: The effects of exogenous expense shocks on a person’s working hours, and the role of gender in this story