The Dilemma of Gender Equality: How Labor Market Regulation Divides Women by Class

Women shoulder a heavier burden of family work than men in modern society, preventing them from matching male success in the external labor market. At least hypothetically, limiting working hours is a plausible way to level the playing field by creating the possibility of less gendered roles for both sexes. But why then are heavily regulated European labor markets associated with a smaller share of women in top management positions compared to liberal market economies such as the US? We explain this puzzle with reference to the difficulty of ambitious women to signal their commitment to high-powered careers in regulated markets. The absence of hours restrictions, on the other hand, allow some women to signal their willingness to relinquish family responsibilities by working extraordinarily long hours at the office, women have a significantly higher chance of rising to managerial positions. We also note, however, that the absence of hours restrictions and other labor protections correspond with larger gender wage gaps lower on the occupational ladder. Moreover, the women who rise to managerial positions remain underrepresented even in liberal market economies.