This study focuses on the role of labor market location in generating gender inequality in earnings. Specifically, the article examines whether suburban versus urban labor market conditions differentially affect gender‐based earnings inequality. Tel Aviv metropolitan area labor force data support the thesis that women's tendency to settle for jobs in the vicinity of home is an exchange between economic opportunities and convenience, to avoid conflict with traditional roles. The cost of staying in the suburban labor market is greater for women than men, and suburban exceeds urban labor market gender‐linked economic discrimination. Copyright © 1991, Wiley Blackwell. All rights reserved