Francisco Parro, Universidad Adolfo Ibáñez

Paper: The Aggregate Costs of Gender Norms: Evidence from Egypt

Abstract: We study the aggregate effects of gender-based distortions arising from household-production norms, social penalties for outsourcing domestic work, and labor-market discrimination. We develop a quantitative model with heterogeneous agents and endogenous occupational choice, calibrated to Egypt. Removing all three distortions raises female labor force participation from 30% to 75%, increases aggregate TFP by about 22%, and raises output per worker by roughly 25%. We find, however, that labor-market reforms are constrained by social norms. Eliminating barriers such as taste-based discrimination has limited effects on female employment when norms continue to assign women primary responsibility for household production or penalize the outsourcing of domestic tasks. We further show that higher female labor force participation does not mechanically translate into higher productivity, since aggregate gains depend on the sectoral allocation of female talent. The results imply that gender-equality policies that target labor-market barriers alone may have muted effects unless they also address the household-level norms that restrict women’s effective labor supply.