Pay Differntials and Gender-Based Promotion Discrimination in a Dual Labour Market

In English Abstract
Historical studies indicate that determinants of the gender wage gap have varied through history. This paper suggests that employment discrimination dominated over wage discrimination in clerical work in Sweden in the mid-1930s. Women were largely excluded from career paths in the offices. This is explained within an analytical framework, in which segmented labour market theory, notably concepts related to internal labour markets, is com¬bined with a simple model of statistical discrimination. The analysis sug¬gests that rational employers allocated men and women to different seg¬ments of this particular labour market on the basis if differences in pre¬dicted tenure. Men were typically selected to career paths where firms in¬vested in their human capital, because men’s predicted long spells of em¬ployment in the firm increased the probability of gathering the returns to these investments. Shorter predicted tenures made it rational to allocate women to dead-end jobs with early productivity crests, where high turno¬ver rates were advantageous for the firm.