Output cost of gender discrimination in the Korean labour market

This study constructs and calibrates a macroeconomic model that explains Korea's glass ceiling and examines the output cost of gender discrimination. The model is based on the span-of-control framework in Lucas (1978). It is assumed that the source of the glass ceiling is women requiring more managerial skill than men to be considered for promotion. According to simulation results, without the glass ceiling, besides an increase in the share of female managers, aggregate output also increases by 8.4%. The output gain from a glass ceiling removal policy is monotonic because the number of workers continues to decline while the number of managers increases gradually. This implies that the more effective the policy implementation, the greater the increase in output.