We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an...

Public employment growth has been paralleled by increased female labor force participation, while real wages for typical female public sector occupations have not increased. In a theoretical model we, first, show that there is a trade-off between day care provision and gross wages for...