Missing Women, Integration Costs, And Big Push Policies In The Saudi Labor Market

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American Economic Journal: Applied Economics


In settings where social norms promote gender segregation, firms may find it costly to employ both men and women. These integration costs may hinder women's employment. We develop a methodology to test for the presence of fixed integration costs and estimate counterfactual women's employment at all-male firms where these costs bind. We apply our approach in Saudi Arabia and find that integration costs bind for the majority of firms. We show that Nitaqat, a gender-neutral quota program that incentivized the hiring of Saudi nationals at private sector firms, induced firms to integrate and dramatically increased Saudi women's employment.

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