Abstract:

We quantify the misallocation of women’s talent by combining differences in female labor force participation (FLFP) with personnel data of a multinational firm covering 60K employees over 100 countries. We estimate the parameters of the firm’s wage policy and back out the implied ability by gender as well as the utility of staying at home. We show that the ability of women at work is always higher than men's; that this ability gap is decreasing in FLFP; and that women face a tax to working outside the home which is larger where norms are more conservative. Eliminating gender norms would allow more able women to replace less able men and increase firm productivity by 32$\%$ keeping the wage bill constant.