Parental leave and the gender pay gap: a look at youth employment choices

Abstract

The gender pay gap in Mexico is a structural problem that affects women's entry into, retention in, and career advancement within the workforce, even though their educational attainment and participation in the labor market have increased in recent decades. This study aims to identify the conditions associated with the pay gap that must be considered to attract young talent and guide socially responsible career choices. Using a quantitative approach, data from 34 companies were analyzed with a game theory methodology, within the context of asymmetric information, complemented by a logit model to identify the most relevant signals that distinguish companies with less gender pay inequality. The results show that, in addition to salaries and compensation, structural factors influence young people's career decisions, particularly women's participation in the labor market and parental leave policies. However, the findings should be interpreted in light of certain limitations, including the relatively small sample size and the absence of firms' strategic responses in the model, which provide avenues for future research.