Barriers to Gender Convergence: The Interactive Effects of Job Inflexibility and Social Norms

TL;DR

This paper models how labor market inflexibility and social norms jointly hinder gender equality in Japan, showing that policy reforms must consider social norms to be effective.

Contribution

It develops a quantitative household labor supply model incorporating social norms and job inflexibility, explaining gender gaps and regional differences.

Findings

Job flexibility reduces wage and occupational gaps

Working hours gap persists due to domestic work burden

Norms influence effectiveness of structural reforms

Abstract

This paper investigates the barriers to gender convergence using Japan as a salient environment to explore the interactive effects of labor market structures and social norms. I develop a quantitative model of household labor supply where couples jointly decide their occupations and working hours. The model features a labor market with inflexible "regular" jobs with convex pay schedules and flexible "non-regular" jobs, interacting with social norms regarding spousal earnings. The calibrated model successfully reproduces observed gender gaps in participation, occupation, and working hours, and explains 48% of the gender wage gap. The model also accounts for cross-regional differences in gender gaps solely through variation in social norms. Counterfactual simulations show that while increasing job flexibility substantially reduces wage and occupational gaps, the working hours gap persists due to the unequal burden of domestic work. Closing this remaining gap requires policies such as affordable household services. Furthermore, the model suggests that the effects of structural reforms can depend on the strength of gender norms, with larger reductions in gender gaps in more conservative environments.