Macroeconomic costs of gender gaps: the case of Mexico

This paper uses the framework of Cuberes and Teignier(2018) to study the quantitative effects of gender gaps inentrepreneurship and workforce participation in Mexico.The focus on one specific country allows us to have detailedinformation on men and women’s participation in householdproduction and their productivity in that sector. In line withour previous research, the occupational choice modelpredicts substantial losses in the country’s income percapita. Gender gaps in the Mexican labor market, especiallyin labor force participation, represent a 22% fall in totaloutput. Market output drops by 26.5%, while householdoutput experiences a five-fold increase. The presence of thelarge gap in labor force participations implies that it isimportant to introduce the household sector into the modelto take the production that takes place outside the marketsector into account.