| Abstract: |
Inflationary shocks do not affect all workers equally. Comparing men and
women, we document two facts. First, both demand- and supply-driven
inflationary shocks widen the gender wage gap within industries and
occupations. Because these shocks imply opposite business-cycle conditions,
their common effect points to inflation as the relevant force. Second, women
and men perceive the same inflationary shocks as having different labor-market
consequences: women expect conditions to worsen, while men expect them to
improve. This asymmetry creates an expectations channel linking inflation to
unequal wage growth. We formalize this channel in a New Keynesian
search-and-matching model with male and female workers, imperfect information,
and gender-specific ambiguity attitudes. Common macroeconomic signals lead
ambiguity-averse women to place greater weight on adverse supply-driven
states. For inflationary signals, this lowers their perceived outside options
and wage demands relative to men's. Divergent perceptions translate common
inflationary shocks into divergent pay. |