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September 20, 2022

Does gender inequality in today’s labor market perpetuate gender inequality in future generations?

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Gender gaps in employment, career progression, and income remain pervasive around the world. While these inequalities obviously affect the lives of working-age women today, they can also have important implications for the next generation. 

How might gender inequality in the current labor market perpetuate gender inequality in future generations? One possible channel is through the shaping of aspirations. Local labor market conditions may influence the aspirations and expectations of children and adolescents. Better career opportunities for men than women might therefore lead boys to have higher aspirations than girls. Improving job opportunities for women could narrow this gap by changing young girls’ perceptions about their potential future careers.

Extensive research has demonstrated that aspirations and expectations play an important role in determining future outcomes. How a child perceives her future and how her parents perceive her future matter for the decisions made today. Many of these decisions—about education and other aspects of human capital—shape eventual career trajectories. 

In recent work we investigate the link between aspirations and labor market conditions in Japan, a high-income country which consistently ranks poorly in global gender equality rankings. (It ranked 116th out of 146 countries in the Global Gender Gap Report prepared by the World Economic Forum in 2022.) We follow the lives of a 2001 birth cohort of Japanese children from birth to age 19. When these children were in their early teens, the survey asked them about their aspirations for their education, fertility, and marriage. It also asked their parents about their own educational aspirations for their children. 

We first document that boys and girls have very different aspirations for the future: boys are more likely to want to go to university, while girls want to marry earlier and have children earlier. Moreover, parents of boys are more likely to want their child to go to university, compared to parents of girls.

We then examine how labor market conditions—specifically, labor market opportunities for women—might affect these gender gaps. Linking our survey data to female employment rates at the municipality level, we show that gender gaps in aspirations are smaller in municipalities with higher female employment. Consistent with these findings, we show that higher female employment rates are also linked to relatively greater financial expenditures and parental time spent with girls compared to boys. 

Because respondents are surveyed until age 19, we know whether they eventually enroll in university. Using this information, we find that university aspirations at earlier ages predict well the actual university enrollment at age 19. In addition, gender gaps in university enrollment are smaller in areas with more female job opportunities, exactly as was true for gender gaps in aspirations.  

In short, gender gaps in the labor market today can lead to gender gaps in aspirations among youth and therefore also to gender gaps in the outcomes that girls and boys experience in adulthood. Improving opportunities for women in the labor market today could help not only the current generation of working-age women, but also the next generation. 

© Teresa Molina and Emiko Usui

Teresa Molina is associate professor of economics at the University of Hawaii at Manoa and a Research Affiliate of IZA.
Emiko Usui is professor of economics at Hitotsubashi University and a Research Fellow of IZA.

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