Chapter 7: Do Prejudices on Gender Sensitize Capital Mobility? An Alternative Perspective on Capital Mobility

The purpose of the chapter is to examine the causal relation between gender-based wage discrimination and capital mobility. While the extant literature is enriched with significant theoretical as well as empirical findings on the phenomenon mentioned above, most of it is unidirectional. Those findings hinge on the fact that discrimination is an outcome of capital mobility, such as foreign direct investment (FDI). However, the reverse causality has mostly been neglected in contemporary literature. This chapter aims to explain whether or not gender-based discrimination can act as a catalyst in driving capital. In simple terms, we examine whether or not discrimination acts to attract capital. In doing so, we employ an elementary general equilibrium model with a single agent carrying out both production and consumption activities. This becomes useful in illustrating the concepts of efficient allocation, general equilibrium, and decentralization through the usual market mechanism.