Arbitrary stereotypes cause gender segregation in labor markets

Title: Arbitrary stereotypes cause gender segregation in labor markets (with Ernesto Reuben and Astrid Hopfensitz)

Abstract: Not only do men and women choose different professions at dissimilar rates, but also within professions, men and women often specialize in different jobs. However, there is mounting evidence that differences in ability cannot account for the observed degree of specialization along gender lines. In this paper, we study specialization and hiring decisions in a labor market experiment where employers cannot observe the workers’ abilities but can infer them through the workers’ specialization decision and their gender. The advantage of using the laboratory is that it allows us to observe the innate abilities of individuals and to induce arbitrary gender stereotypes by controlling the information individuals have about the performance distribution. We find that gender stereotypes become self-fulfilling due to specialization and hiring decisions and that giving workers and employers more information about the distribution of innate abilities is not sufficient to move away from the discriminatory equilibrium.