Seminar Equal treatment, unequal family duties: gendered screening and selective exclusion in the workplace

Abstract

This paper develops a theoretical model to study how gender neutrality (a ban on gender discrimination) in hiring and compensation can unintentionally reinforce labor market inequalities when family duties differ across genders. We consider a monopsonistic labor market where workers differ in gender-specific outside options and labor-supply costs—driven by family responsibilities—but exhibit the same underlying heterogeneity in productivity. We then compare outcomes under gender-based tagging and gender-neutral screening. When tagging is allowed, the firm offers efficient, gender-specific contracts. Under gender-neutral screening, however, incentive and participation constraints interact to distort not only effort levels and wages but also the extensive margin of employment. The model identifies five regimes with different binding constraints and distinct intensive- and extensive-margin distortions. A key finding is that, as women’s outside options improve and approach those of men, gender neutrality can paradoxically induce female exclusion, since equal treatment makes accommodating women’s higher family-duty burden too costly for the employer. The analysis shows that, unless family responsibilities are more equally shared, nominally gender-neutral policies may ultimately reinforce workplace inequalities.