The Long-Run Effects of Peer Gender on Occupational Sorting and the Wage Gap

We study the impact of the early gender environment on inequality in the labor market. To this end, we link primary school data to occupations and earnings. We find that women exposed to more girls at critical ages earn more later on: A 10 percent increase in the share of girls leads to a gender wage gap reduction of 2.7 percent. We explore mechanisms and find a strong selection of women into less gender-stereotypical educational tracks and occupations, leading to higher earnings. The gender environment at an early age, therefore, leads to persistent changes in career trajectories and earnings. (JEL I24, I26, J16, J24, J31)