Mauricio Salazar-Saenz

Job market paper

A Household Search Model of the Labor Market with Home Production

Women are often observed to participate less in the labor market, earn lower wages, and supply more labor inside the household, especially when married. In this paper, I study the dynamics of labor participation, considering the time allocation decisions within households by developing a household search model of the labor market that includes home production. I estimate the model with household-level data from Colombia that contains rich information on both the labor market outcomes and the spouses’ time use. The model allows for a gender gap decomposition that takes into account optimal behavior. This decomposition captures the differential impacts of wage offers, labor market frictions, productivities in home production, and preferences over leisure and consumption in determining the observed gender differentials in the labor market. I find that that differences in home production between spouses account for a substantial share of the gender participation gap in Colombia.