Does the expansion of higher education reduce gender gaps in the labor market? Evidence from a natural experiment

Abstract

In 2005 Chilean congress approved a bill that established a new funding tool for higher education funding through a "private system" of student loans (named CAE). The system aimed to support higher education inclusion among students with academic merits overcoming the lack of resources for ensuring access. Politicians have referred to this reform in higher education funding as a critical factor for expanding higher education enrollment. By its immediate results, it is a great strategy to cope with inequality and social mobility issues. However, there is little empirical evidence about labor market variables' overall effects, such as gender discrimination. This work attempts to estimate the new instrument's impact on the three standard measures of gender labor discrimination: labor participation, the gender wage gap, and the glass ceiling. The empirical strategy uses a difference-in-difference approach to provide estimates. The results indicate that the CAE policy changed women's labor market participation and contributed to close the gender pay gap in the labor market. However, the glass ceiling increased in the entire labor market, but not in the white-collar job market in specific.