infonet-economy

In the last decades the US economy experienced a rise in female labor force participation, a reversal of the gender education gap and a closing of the gender wage gap. Importantly, these changes occurred at a substantially different pace over time. During the same period, workers in the US faced a considerable shift in labor demand from more physical to more intellectual skill requirements. I rationalize these observations in the context of a general equilibrium model displaying two key assumptions: (1) the demand for brain increases both within and across education groups; and (2) women have less brawn than men. Given the observed US technical change process, the model replicates (1) over half of the narrowing gender wage gap, (2) most of the narrowing employment gap, and (3) all of the reversing education gap. Crucially, the model can also account for the time-varying-path of the narrowing gender divide with an initial stagnation and a later acceleration in female wages and education rates.