The Cultural Origin of Gender Gaps in Pay and Mobility: Evidence from Canada

Abstract

This paper studies the role of cultural norms, specifically those regarding gendered roles in employment, in explaining the gender gap in pay using a unique matched employer-employee dataset linked with immigration records in Canada. To separate the effects of culture from markets and institutions, we investigate how inherited gender norms among immigrants shape their labor market outcomes in the host country. We find that improvements in gender norms are strongly associated with a narrower gender gap in pay and mobility. These associations persist even after accounting for education, occupation, and the child penalty, as well as a broad set of interacted fixed effects between firms and workers, suggesting that the findings are unlikely due to discrimination by firms or sorting by workers. We propose a new mechanism wherein gender norms influence the gap in how women and men find job opportunities through their social networks, leading to disparities in both wages and mobility. Distinctive from prevailing discussions on the influence of gender norms, our results highlight that even if women do not internalize these norms, they can still face similarly disadvantaged outcomes.