Monopsony and Discrimination Against Women in the Labour Market in an Extended Solowian Model

The purpose of this paper is to study interdependence between economic growth and marketstructure involving the gender division of labour. It makes a unique contribution tomodelling economic mechanisms of economic growth involving gender discriminationagainst woman due to monopsony in the labour market. The labour market for men andcapital goods markets are perfectly competitive. The labour market for women ischaracterised by monopsony. The profits of firms are endogenously determined and equallydistributed among households. I build a model, find a computational procedure to plot themovement of the economy, and conduct a comparative static analysis in some parameters. Ialso compare the economic performance of the model under perfect competition andmonopsony. I conclude that monopsony in the labour market for women lowers nationaloutput, national wealth, and utility levels for families in comparison to perfect competition.JEL classification code: O41, J42, L13Keywords: monopsony, gender discrimination, economic growth, endogenous labour supply, Solowmodel