The Misallocation of Women’s Talent Across Countries: Evidence from Personnel Data

Abstract

We quantify the misallocation of women’s talent by combining differences in FLFP with personnel data of a large MNE. The firm employs over 60K people over 100 countries.We estimate the parameters of the firm’s wage policy and back out the implied ability by gender as well as the benefit of staying at home. We show that women’s ability is always higher but the gap is decreasing in FLFP, as expected; that the difference in the home payoffs between men and women is larger where norms are more conservative; and that the actual wage gap is much larger once differences in ability are taken into account.