Gender Quotas and Human Capital Formation: A Relative Deprivation Approach
German Economic Review,
We study a quota's effect on individual human capital investment incentives beyond merely altering individual's overall probability of being promoted. We assume that individuals sense relative deprivation from unfavorable (income) comparisons within their reference group and that comparisons take place within the same gender. The introduction of a female quota increases (decreases) the number of women (men) holding top positions. On one hand, the relative deprivation to which female individuals are subjected to increases. These female individuals respond to an increase in their relative deprivation by acquiring additional human capital which, because it enables them to increase their earnings, reduces their relative deprivation. On the other hand, male individuals invest less in human capital in response to a decrease in relative deprivation. We show that the human capital formed by women who are encouraged to do so by the quotas is larger than the human capital that men who are discouraged by the quotas refrain from forming. However, the positive human capital accumulation effect hinges on a certain level of ability by gender and on how much individuals perceive relative deprivation.
Socially Gainful Gender Quotas
Journal of Economic Behavior & Organization,
We study the impact of gender quotas on the acquisition of human capital. We assume that individuals’ formation of human capital is influenced by the prospect of landing high-pay top positions, and that these positions are regulated by gender-specific quotas. In the absence of quotas, women consider their chances of getting top positions to be lower than men’s. The lure of top positions induces even men of relatively low ability to engage in human capital formation, whereas women of relatively high ability do not expect to get top positions and do not therefore engage in human capital formation. Gender quotas discourage men who are less efficient in forming human capital, and encourage women who are more efficient in forming human capital. We provide a condition under which the net result of the institution of gender quotas is an increase in human capital in the economy as a whole.