Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263757 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9827
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an extension of paid maternity leave duration has ambiguous effects on gender inequality. In contrast, child care subsidies, which require higher taxes, and loans, which do not, unambiguously reduce gender inequality. We illustrate the mechanisms at play in a numerical example using Spanish data.
Subjects: 
liquidity constraints
gender wage and participation gaps
statistical discrimination
numerical example
JEL: 
J16
J18
J13
Document Type: 
Working Paper
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