Families’ Career Investments and Firms’ Promotion Decisions
AbstractThis paper shows that gender gaps in career success are jointly determined by the
career investments decisions made within the family and by the decision of firms to train selected
workers to reach top positions. Using rich administrative data from Denmark, we first document
large gender gaps in training and promotion. Importantly, these gaps differ widely across different
types of couples, suggesting different degrees of specialization in household and market production.
Motivated by these novel facts, we specify and estimate a quantitative equilibrium model of the
interplay between families’ and firms’ investments in workers’ human capital. We use the estimated
model to analyze the effectiveness and distributional consequences of parental leave policies and
diversity, equity, and inclusion initiatives to promote families’ and firms’ investments in women.