Donald Marron recently bloggedabout a new economics paper on gender arbitrage by multinationals in South Korea. The idea behind gender arbitrage is that discrimination in hiring against a particular group, like women or minorities, creates opportunities for non-discriminating employers to hire talented people for a lower wage. When non-discriminating employers take advantage of this, it should eventually erase the gap in wages between the disadvantaged group and the rest of the labor market. This paper found that multinational corporations have been able to benefit from discrimination against women in the labor market that drives down wages for educated women.  In Korea, working women earn only 63% of what working men do. (Not all of this is due to discrimination.) The paper found that among multinationals, a 10 percentage point increase in the number of women in local management positions led to a 1 percentage point increase in return on assets.  Marron points out that the fact that companies that hire more women have a hire profit margin means that there is still room for more arbitrage-- implying that discrimination is still resulting in lower wages for women compared with men who have the same skills and abilities.

As unfortunate as it is that women in Korea are being paid less than they are worth, from the perspective of both women and employers in northern Ghana, this is an enviable problem.  In Ghana as a whole, about 20% of adult males have secondary education or higher; only about 10% of adult females have that level of educational attainment (source: GLSS 5), and the gender gap is most pronounced in the Northern Region.  Traditional views of gender roles still prevent girls from having access to education at the same rate as boys.  (Girls may also have a higher opportunity cost of education: girls are often more economically valuable than boys, because they can assist with child-rearing and food processing, or work as maids, at an age where boys are still too young to be much help with farm work.)  The result of this is that it is difficult to find qualified female candidates for jobs requiring a high level of education.

This is especially apparent to employers like me, who actually have a bias in favor of female employees.  Since the majority of the respondents in my survey were female, I wanted to hire female surveyors because they are more likely to put female respondents at ease.  Despite actively recruiting female candidates, posting notices encouraging women to apply, and asking the field managers to try to achieve a balance in the number of male and female surveyors we hired, we received few applications from female candidates, and less than a quarter of the surveyors we hired ended up being female.