Across countries, women and men allocate time differently between market work, domestic services, and care work. In this paper, we document the gender division of work, drawing on a new harmonized dataset that provides us with high-quality time use data for 50 countries spanning the global income distribution. A striking feature of the data is the wide dispersion across countries at similar income levels. We use these data to motivate a macroeconomic model of household time use in which country-level allocations are shaped by wages and a set of “wedges” that resemble productivity, preferences, and disutilities. Taking the model to country-level observations, we find that a wedge related to the disutility of market work for women plays a crucial role in generating the observed dispersion of outcomes, particularly for middle-income countries. Variation in the division of non-market work is principally shaped by a wedge indicating greater disutility for men, which is especially large in some low- and middle-income countries.

The extent to which women participate in the labor market varies greatly across the globe. If such differences reflect distortions that women face in accessing good jobs, they can reduce economic activity through a misallocation of talent. In this paper, we build on Hsieh et al. (2019) to provide a methodology to quantify these productivity consequences. The index we propose, the ”Global Gender Distortions Index (GGDI)”, measures the losses in aggregate productivity that gender-based misallocation imposes. Our index allows us to separately identify labor demand distortions (e.g., discrimination in hiring for formal jobs) from labor supply distortions (e.g., frictions that discourage women’s labor force participation) and can be computed using data on labor income and job types. Our methodology also highlights an important distinction between welfare-relevant misallocation and the consequences on aggregate GDP if misallocation arises between market work and non-market activities. To showcase the versatility of our index, we analyze gender misallocation within countries over time, across countries over the development spectrum, and across local labor markets within countries. We find that misallocation is substantial and that demand distortions account for most of the productivity losses.

We revisit the role of human capital in cross-country income differences. We develop a general equilibrium model where workers of different skill groups sort into occupations by comparative advantage. Wages and employment depend on workers’ skill quality, occupation-specific country-embedded productivity, and occupational distortions. Using harmonized microdata for 50 countries, we infer these components from the model’s equilibrium conditions. Workers in rich countries exhibit higher skill quality and substantially greater productivity, especially in white-collar occupations. Human capital explains 52 percent of output-per-worker gaps, largely through the complementarity between skill composition and quality, and further amplified by technology choices biased toward skilled labor. Adopting the U.S. distribution of skill groups yields limited gains for poor countries without higher quality. Occupational distortions are more severe in low-income countries, reducing white-collar employment and raising wage premia, but with modest aggregate effects.

Across countries, the organisation of production differs widely, and firms are substantially smaller in low-income countries. How are these differences related to a country’s skill endowment? In this paper, we study the interplay between skill endowment and firm size along the development path. Empirically, we measure the skill intensity of employment by firm size for 57 countries and document four facts. First, we show that the share of employment in large firms is about four times as high in high-income countries as in low-income countries. Second, we find that across countries, employees of large firms are more skilled than those of small firms. Third, whereas small firms in rich countries are almost as skill intensive as large firms, small firms employ much fewer skilled workers in poor countries. Fourth, whereas small firms are almost as skill intensive as large f irms when the skill premium is low, they are much less skill-intensive when the skill premium is high. This evidence suggests that small firms can easily substitute low-skill for high skill workers when high-skill workers are scarce and expensive, but large firms are less flexible. As a result, the low skill endowment of low-income countries limits the size of firms in these countries. We then use a span-of-control model with worker skill heterogeneity and two technologies (large and small scale) to analyze the effect of skill endowments on the firm size distribution and economic development. Calibrated to the US and varying only skill endowments, our model closely replicates skill intensity by firm size across countries. It implies that, to a large extent, it is the lower skill endowments of poor countries that lie behind the four facts we document. Our findings also imply that greater skill levels benefit production not only directly, but also through a shift to more large scale production units. Finally, we illustrate how our work relates to the literature on misallocation.

We exploit the quasi-random allocation of asylum seekers across Swiss cantons and the high frequency of national referenda to identify the causal effect of immigration on political outcomes in receiving countries. We find that the arrival of asylum seekers causes voters to increase their support for right-wing and conservative policies. However, this effect is driven by episodes of unusually high inflows of asylum seekers. Moreover, we find that for votes on immigration and refugee policy, the arrival of more asylum seekers shifts voters towards policies endorsed by conservative and centre-right parties but not towards positions backed by the rightmost anti-immigration party. In contrast, the shift towards the rightmost stances is sizeable in votes related to the welfare state, international integration, and the rights of minorities.