Changes In Relative Earnings Research Articles

Daily labor mobility and the timing of entry into motherhood

The influence of female employment on fertility has been widely studied. However, there is a gap in the knowledge of the effect of daily labor mobility on fertility. The paper presents the study of the direct and indirect effects of commuting on the timing of entry into motherhood by comparison the age‐specific first‐birth rates of female commuters and non‐commuters. The effects appear in simultaneous decision making on childbearing and com‐ muting, and effects of cross‐municipal flows of population and earnings, and fertility norms diffusion on childbearing. Estimation strategy addresses the problem of potential endogeneity of commuting decision. The study uses individual register data from Sweden for women born in 1974 and residing in the Stockholm area following them from 19 to 32 years old. Results demonstrate that commuting women postpone their first birth. Commuters’ first‐birth rates are more sensitive to the changes in relative earnings, fertility norms, and the proportion of commuters in the residing population. Swedish family and labor policies significantly improve reconciliation of family and working life in comparison with many European countries. However, the study demonstrates that the policies do not address commuting costs (in a general meaning) in childbearing decision. The results can be used to explain the link between fertility and daily labor mobility in high‐income countries with a high proportion of women involved in daily labor mobility.

Breaking the Links: Natural Resource Booms and Intergenerational Mobility

Abstract The paper demonstrates that a large economic sock such as an oil boom increases intergenerational earnings mobility among directly affected men, mostly through increased bottom-up mobility, but not for women. Preexisting local differences in mobility or shifts in the earnings distributions do not drive these findings. Instead, changes in relative earnings paid to workers with different skills offer the best explanation. Moreover, we document that intergenerational mobility is significantly higher for the indirectly affected thirdgeneration and that the oil boom broke the earnings link between first- and third-generation men.

The Partner Pay Gap: Associations between Spouses’ Relative Earnings and Life Satisfaction among Couples in the UK

Despite women’s recent gains in education and employment, husbands still tend to out-earn their wives. This article examines the relationship between the partner pay gap (i.e. the difference in earned income between married, co-resident partners) and life satisfaction. Contrary to previous studies, we investigate the effects of recent changes in relative earnings within couples as well as labour market transitions. Using several waves of the UK Household Longitudinal Study, we reveal that men exhibit an increase in life satisfaction in response to a recent increase in their proportional earnings relative to their wives’ earnings. For women, changes in proportional earnings had no effect on life satisfaction. We also find secondary-earning husbands report lower average life satisfaction than majority-earning and equal-earning men, while such differences were not found for women. The analysis offers compelling evidence of the ongoing role of gendered norms in the sustenance of the partner pay gap.

Personal Income Taxation and College Major Choice: A Case Study of the 1986 Tax Reform Act

This article evaluates whether changes in relative earnings across majors due to a federal tax reform are likely to affect college major choice. I first estimate the change in expected after-tax lifetime income due to the 1986 Tax Reform Act for 47 majors. I find that the average major experienced an increase in expected after-tax lifetime income of 6.2 percent and that the standard deviation of major-specific expected lifetime income premia increased by 6.1 percent. I estimate the impact of the change in relative earnings on the distribution of completed college majors, finding no statistically significant change in the composition of majors following the reform. Consistent with the estimation, simulations reveal that at most 0.25 percent of males completed a different major in response to the reform.

Husbands' Participation in Housework and Child Care in India.

The authors tested theories of housework among tea plantation workers in India, where women comprise the main part of the workforce and are breadwinners in their families. Analysis of 49 semistructured interviews and survey data from 3,181 female workers revealed that although women were mainly responsible for domestic labor, more than half of husbands usually or sometimes helped their wives with cooking, fuel wood collection, and child care. The analyses revealed a curvilinear relationship between husbands' earnings share and their participation in each task, supporting theories of bargaining and gender display. The probability of male participation decreased to its lowest level when men earned less than their wives. Husbands rarely helped with clothes washing-considered the most feminine task-and their participation did not respond to changes in relative earnings. These results support the authors' argument that patterns of bargaining and gender display will vary depending on the gendered nature of housework tasks within a particular society.

Accounting for the Gender Gap in College Attainment

One striking phenomenon in the U.S. labor market is the reversal of the gender gap in college attainment. Females have outnumbered males in college attainment since 1987. We develop a discrete choice model of college entry decisions to study the effects of changes in relative earnings, changes in parental education, and changes in the marriage market on time series observations of college attainment by gender. We find that the increase in the relative earnings between college and high school individuals and the increasing parental education have important effects on the increase in college attainment for both genders but cannot explain the reversal of the gender gap. Declining marriage rates decrease returns to college for females less than those for males, and thus is crucial in explaining the reversal of the gender gap in college attainment.

The Evolution of Education: A Macroeconomic Analysis

Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? We develop a model of schooling decisions in order to assess the quantitative contribution of technological progress in explaining the evolution of education. We use earnings across educational groups and growth in gross domestic product per worker to restrict technological progress. These restrictions imply substantial skill-biased technical change (SBTC). We find that changes in relative earnings through SBTC can explain the bulk of the increase in educational attainment. In particular, a calibrated version of the model generates an increase in average years of schooling of 48 percent compared to 27 percent in the data. This strong effect of changes in relative earnings on educational attainment is robust to relevant variations in the model and is consistent with empirical estimates of the long-run income elasticity of schooling. We also find that the substantial increase in life expectancy observed during the period contributes little to the change in educational attainment in the model.

Marriage, the Sharing Rule, and Pocket Money: The Case of South Korea

Using longitudinal data on private consumption from South Korea, this article examines the marital balance of power between spouses in a dynamic setting by allowing for unobserved heterogeneity at the household level and spouses’ time‐constant unobserved bargaining power. I find that unobserved power plays a significant role in intrahousehold resource allocation. The income pooling hypothesis is no longer rejected after accounting for unobserved power. Relative spousal earnings may be a good proxy for the long‐term balance of power to an extent that cross‐sectional variation in relative earnings across households reflects the pattern of spousal matching. However within‐marriage changes in relative earnings do not induce any significant resource transfer between spouses. The balance of bargaining power is stable within marriage.

Changing wage structure and education in Vietnam, 1992–98

AbstractThis paper examines the changes in relative earnings of workers with different education levels in Vietnam. Using a simple demand‐and‐supply framework developed by Katz and Murphy (1992), it was found that an increase in the relative demand for better‐educated male workers in particular appears to play an important role in explaining the earnings differentials between workers of different education groups. Education reform to better suit the needs of the post‐reform emerging market, on‐the‐job training for workers and equal access to education are some policy options that hold the key to reducing wage inequality between different education groups.

Bargaining Over Housework

Abstract. This paper investigates the limited increase in housework provided by husbands in response to higher earnings and labor force participation by their wives. An explanation is provided that integrates the time availability, relative resources, and gender ideology perspectives that traditionally have been used to explain housework decisions. The outcome is the result of a bargaining process in which two concerns are identified as limiting the response of primary wage earning spouses to the employment of secondary wage earning spouses. First, the secondary wage earners’ employment may in part be motivated by a concern about the durability of their marriage rather than their family's welfare. Second, a balancing of the inconveniences and the net earnings of the additional employment may be viewed as making only a limited contribution to the family's welfare. Empirical results of an analysis of the individual household tasks imply that both gender ideology and the spouses’ earnings are important in determining the hours that each spouse devotes to household tasks. When making decisions about the amount of housework to perform, both spouses respond to changes in relative earnings, but the response of husbands, who are usually the primary wage earners, is smaller than that of wives, who tend to be the secondary wage earners.

How to Improve the Supply of High-Quality Teachers

How to Improve the Supply of High-Quality Teachers

Observable and Unobservable Household Sharing Rules: Evidence from Young Couples' Pocket Money

The leading evidence against the unitary household models is that who gets what is significantly dependent upon who earns how much. However, it is difficult to pin down the causal effect of relative earnings on intra-household resource allocation because households jointly decide both labor supply and consumption. I utilize longitudinal data to analyze the spouse's individual budgets - pocket money. This unique data set allows for the specification of the simultaneous process of household decision-making in a fully stochastic fashion. By doing this, it is possible to differentiate unobserved spousal bargaining power from heterogeneity at the household level. The results imply that the balance of power between spouses is stable over time and robust to transitory changes in relative earnings. Public policies targeting the disadvantaged within households should be designed and implemented on the long-term basis.

Explaining the Decline in Women's Household Labor: Individual Change and Cohort Differences

Women's hours of housework have declined, but does this change represent shifts in the behavior of individuals or differences across cohorts? Using data from the National Longitudinal Surveys, individual and cohort change in housework are examined over a 13‐year period. Responsibility for household tasks declined 10% from 1974–75 to 1987–88. For individual women, changes in housework are associated with life course shifts in time availability as well as with changes in gender attitudes and marital status, but are not related to changes in relative earnings. Cohort differences exist in responsibility for housework in the mid‐1970s and they persist over the 13‐year period. Overall, these findings suggest that aggregate changes in women's household labor reflect both individual change and cohort differences.