Can Behavioural Economics Help Explain Gender Disparities in Labour Markets?

Abstract

The presence of pervasive gender disparities integrated into our labour market outcomes (of promotion, pay, and hiring) poses a threat to our current market functions. This paper determines the potential of behavioural economics in bridging these disparities in the context of labour market outcomes. Drawing on insights from the subject, the paper argues that gender disparities in labour market outcomes can be a result of a variety of behavioural biases and heuristics that lead to sub-optimal decision-making. Using the behavioural lens the paper identifies and focuses on three cognitive biases: the endowment effect, the overconfidence bias and the status quo bias. The paper intends to propose interventions and policy modifications to overcome such ubiquitous biases and correct the present labour market climate.