Earnings Differentials Research Articles

The long-term financial outcome of children diagnosed with ADHD.

Characterize the early trajectories of financial functioning in adults with history of childhood ADHD and use these trajectories to project earnings and savings over the lifetime. Data were drawn from a prospective case-control study (PALS) following participants with a rigorous diagnosis of ADHD during childhood (N = 364) and demographically matched controls (N = 240) for nearly 20 years. Participants and their parents reported on an array of financial outcomes when participants were 25 and 30 years old. At age 30, adults with a history of ADHD exhibited substantially worse outcomes than controls on most financial indicators, even when they and their parents no longer endorsed any DSM symptoms of ADHD. Between ages 25 and 30, probands had exhibited considerably slower growth than controls in positive financial indicators (e.g., monthly income) and substantially less reduction than controls in indicators of financial dependence (e.g., living with parents), indicating worsening or sustained deficits on nearly all measures. When earnings trajectories from age 25 to age 30 were extrapolated using matched census data, male probands were projected to earn $1.27 million less than controls over their working lifetime, reaching retirement with up to 75% lower net worth. The financial deficit of adults with history of childhood ADHD grows across early adulthood. Projections based on early financial trajectories suggest very large cumulative differences in earnings and savings. With or without persistence of the DSM symptoms, the adult sequela of childhood ADHD can be conceptualized as a chronic condition often requiring considerable support from others during adulthood. (PsycINFO Database Record (c) 2020 APA, all rights reserved).

Gender Gap in Earnings in Vietnam Why Do Vietnamese Women Work in Lower Paid Occupations?

Differences in earnings between male and female workers persist in developed and developing countries despite a narrowing of gender gaps in educational attainment over the past half-century. This paper examines the gender wage gap in Vietnam and shows that a nontrivial part of the gap is associated with occupational sorting. The paper considers three explanations for why occupational sorting emerges. First, it explores whether women sort into occupations with better nonmonetary characteristics, such as paid leave and shorter hours. The data from Labor Force Surveys support this hypothesis. Second, it checks if occupational sorting among the adult labor force is driven by social norms about gender roles learned and internalized at an early age. To do so, the paper checks for evidence of sorting in the aspirations of 12-year-old children. Specifically, the analysis simulates what the gender wage gap would be if boys and girls pursued the occupations they aspired to at age 12, and the distribution of salaries remained unchanged. The paper does not find support for the hypothesis that gender norms drive occupational sorting by inducing aspirational sorting at an early age. Finally, for individuals with higher education, the paper checks if occupational sorting occurs during the school-to-work transition, when women face higher barriers in finding a job in their field of study. The analysis does not find evidence to support this last hypothesis. Overall, the findings suggest that in Vietnam gender-specific preferences for nonmonetary job characteristics play a key role in the emergence of occupational sorting.

Motives and Characteristics of Highly Qualified Labor Force Migration: Case Study of Serbia

The emigration of highly qualified labour from the countries of Eastern Europe is one of the worst effects of transitional and post-transitional period. It discredits the educational system of Eastern European countries, but also creates long-term problems in the development of the economy and all other sectors of society. The difference in earnings between immigrant countries of Western Europe and North America and the countries of emigration is the dominant motive for migration. But other motives are also not irrelevant. This paper is an initial part of a wider research of the international movement of labour which should provide guidance to the countries of emigration to mitigate the consequences of this process. Student surveys in Eastern European countries, their thoughts and plans, will provide information on the motives of emigration. On the other hand, by surveying the experiences of young highly educated workforce who has already emigrated, a true picture of experiences and the expected and achieved intentions will be obtained. Finally, certain questions in the questionnaire will also give an answer to the question, which would be new moments that would encourage young experts not to leave the country, or to return those who emigrated.
 Keywords: International migration, brain drain, state measures, retaining talent

Earnings Differences among Senior University Administrators: Evidence by Gender and Academic Field

This study examines earnings inequality by gender and academic field among senior university administrators, including presidents, vice presidents, associate and assistant vice presidents, and deans, using data from the Canadian province of Ontario. While a 4.4 percent earnings gap between male and female administrators is initially identified, much of the gap is explained by earnings inequality across academic fields and by the career experience of the administrators. Administrators who specialize in professional fields such as engineering, health sciences, law, and social work earn between 12 percent and 33 percent more than administrators who specialize in liberal fields in the humanities and social sciences.

The Effect of Gender and Gender Pairing on Bargaining: Evidence from an Artefactual Field Experiment

Men and women negotiate differently, which might create gender inequality in access to resources as well as efficiency losses due to disagreement. We study the role of gender and gender pairing in bilateral bargaining, using a lab-in-the-field experiment in which pairs of participants bargain over the division of a fixed amount of resources. We vary the gender composition of the bargaining pairs as well as the disclosure of the participants' identities. We find gender differences in earnings, agreement and demands, but only when the identities are disclosed. Women in same-gender pairs obtain higher earnings than men and women in mixed-gender pairs. This is the result of the lower likelihood of disagreement among women-only pairs. Women leave more on the bargaining table, conditional on their beliefs, which contributes to the lower disagreement and higher earnings among women-only pairs.

The Effect of Gender and Gender Pairing on Bargaining: Evidence from an Artefactual Field Experiment

Men and women negotiate differently, which might create gender inequality in access to resources as well as efficiency losses due to disagreement. We study the role of gender and gender pairing in bilateral bargaining, using a lab-in-the-field experiment in which pairs of participants bargain over the division of a fixed amount of resources. We vary the gender composition of the bargaining pairs as well as the disclosure of the participants' identities. We find gender differences in earnings, agreement and demands, but only when the identities are disclosed. Women in same-gender pairs obtain higher earnings than men and women in mixed-gender pairs. This is the result of the lower likelihood of disagreement among women-only pairs. Women leave more on the bargaining table, conditional on their beliefs, which contributes to the lower disagreement and higher earnings among women-only pairs.

Bidding for the Better Jobs: An Experiment on Gender Differences in Competitiveness without a Real-Effort Task

We model the competitive striving for high-level positions in firms by letting experimental participants compete in bidding for prizes of different sizes in a hierarchy. Our set-up includes both a flat hierarchy and a steep hierarchy. We mainly focus on whether men and women behave differently with respect to bidding for higher and lower positions, but also consider other possible sources of heterogeneity in behavior. On average, women bid higher than men, but not significantly so, except for the top position of the flat hierarchy. For lower positions, bids are generally close to optimal bidding whereas they are relatively lower for higher positions. Women do win the top positions significantly more often, but there are no significant gender differences in earnings, the difference between prizes and bids. Our results suggest that the strong gender differences in attitudes towards competition that were found in numerous previous studies based on competition in tournaments with real-effort tasks may be specific to that environment. An implication of our results thus is that a particular phenomenon should be studied using more than one experimental design.

SOFT SKILLS AND EARNINGS: EVIDENCE FROM A NATIONWIDE SURVEY IN POLAND

The purpose of this paper is to examine differences in earnings in Poland with respect to the level of soft skills. The study is based on data from a nationwide survey on human capital carried out in 2014. Eight types of soft skills are taken into consideration: entrepreneurship and showing initiative, resistance to stress, cooperation in a group, communicativeness, ability to resolve conflicts, coordination of the work of other employees, creativity and continuous learning of new things. Distributions of earnings corresponding to groups of individuals declaring low, medium and high soft skills are compared by statistical methods, namely by kernel estimation, one-way ANOVA on ranks and relative distributions. The analysis leads to the conclusion that earnings distributions vary substantially with regard to the level of soft skills. The biggest differences concern such skills as entrepreneurship and showing initiative, coordination of the work of other employees and creativity. This paper contributes to the knowledge about the associations between soft skills level and earnings.

Дифференциация заработной платы в Российской Федерации: территориальные особенности

The article presents an analysis of the differentiation of wages from the position of identifying the influence of the territorial factor. The study of territorial wages remains relevant for the Russian Federation; features of the regions, the development of certain types of activities in combination with regional features continue to affect differences in earnings. The purpose of the article is to identify the territorial features of wage differentiation. Aggregated data of official statistics and microdata of the Selective observation of population incomes and participation in social programs were used as an information base. The analysis of the data of regional statistics of wages, leaders and outsiders, the level of variation in wages within the federal districts. Due to regional price differences, the analysis takes into account differences in changes in prices and the purchasing power of wages. The emphasis is placed on the possibilities of using Mincer type wage models for individual regions and their comparative analysis based on empirical data. Regression models for leader entities and outsider entities, federal districts and the Russian Federation as a whole have been constructed. Based on the results of the analysis, conclusions are drawn about the sustainability of territorial wage differentiation in Russia. The main differences are manifested in the maximum values of the average wage by subjects, while the minimum values are almost at the same level. When purchasing power is taken into account with the help of a fixed set of consumer goods and services, differences in the remuneration of subjects of leadership and subjects of outsiders are reduced from four to three times. Simulation of the logarithm of wages for all federal districts and the Russian Federation as a whole confirmed a statistically significant influence on factors such as age, level of education, gender of a worker, type of settlement, and membership in a particular socio-professional group. A noticeable reduction in the return on education in federal districts with a low level of average wages was revealed; in such conditions, the employee’s membership in the group of managers becomes the dominant earnings. Attention is focused on increasing cash incomes of the population and wages in regions with special living conditions as a factor in overcoming the outflow of the population from Siberia and the Far East. Further areas of the study of territorial wage differentiation can be expanded by using panel data for each region in the analysis in order to study the dependencies in space and time.

Earnings Dynamics and Intergenerational Transmission of Skill

This paper develops and estimates a two-factor model of intergenerational skill transmission when earnings inequality reflects differences in individual skills and other non-skill shocks. We consider heterogeneity in both initial skills and skill growth rates, allowing variation in skill growth to change over the lifecycle. Using administrative tax data on two linked generations of Canadians covering 37 years, we exploit covariances in log earnings (at different ages) both across and within generations to identify and estimate the intergenerational correlation structure for initial skills and skill growth rates, lifecycle skill growth profiles, and the dynamics of non-skill earnings shocks.We estimate low intergenerational elasticities (IGEs) for earnings in Canada (less than 0.2, even when based on 5- and 9-year average earnings); however, skill IGEs are typically 2-3 times larger due to considerable (and persistent) variation in earnings conditional on skills. Both earnings and skill IGEs decline substantially for more recent cohorts and are lower for children born to younger fathers.We estimate significant heterogeneity in both initial skills and skill growth rates, showing that intergenerational transmission of these factors explains up to 40% of children's skill variation. Skills become a more important determinant of earnings over the first part of workers' careers, while intergenerational transmission of skills becomes less important with age. Although inherited initial skills (compared to skill growth) are a more important determinant of children's skills throughout their lives, parents' initial skills and skill growth rates are equally important determinants of children's skills, largely because both strongly influence children's initial skills.Finally, we study intergenerational mobility for the 35 largest cities in Canada, determining the extent to which considerable differences in earnings and skill IGEs vary with the extent of local heterogeneity in parental skills vs. earnings instability. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

The Gendered Division of Paid and Domestic Work Under Lockdown

COVID-19 has uprooted many aspects of parents' daily routines, from their jobs to their childcare arrangements. In this paper, we provide a novel description of how parents in England living in two-parent opposite-gender families are spending their time under lockdown. We find that mothers' paid work has taken a larger hit than that of fathers', on both the extensive and intensive margins. We find that mothers are spending substantially longer in childcare and housework than their partners and that they are spending a larger fraction of their paid work hours having to juggle work and childcare. Gender differences in the allocation of domestic work cannot be straightforwardly explained by gender differences in employment rates or earnings. Very large gender asymmetries emerge when one partner has stopped working for pay during the crisis: mothers who have stopped working for pay do far more domestic work than fathers in the equivalent situation do.

A Quantitative Analysis of Life-Cycle Inequality Across U.S. and Europe

I document that (i) the mean and dispersion of pre-tax labor earnings grow faster over the life-cycle in the U.S. than in some European countries; (ii) these facts are largely driven by individuals with at least a college degree. I study these differences in labor earnings inequality using a life-cycle model of human capital accumulation and elastic labor supply which features non-linear taxation, in conjunction with a college choice and complementary investments during college. The model economy accounts for the differential mean earnings growth patterns of individuals with and without a college degree in the United States, as well as the observed within-group inequality over the life cycle. I find that non-linear taxation significantly suppresses pre-tax earnings, reduces college attendance, and investments during college. More generous subsidies and transfers for college exacerbate labor earning inequality. I find that differences in taxation and college subsidies alone account for 94% of the differences in mean earnings, and 80% of the differences in variance of log earnings over the life-cycle across the U.S. and European countries. To fully reconcile the model with data, the role of differences in initial conditions appear key.

Adolescent depression and subsequent earnings across early to middle adulthood: a 25-year longitudinal cohort study.

The few available studies on early-onset depression and future earnings offer ambiguous findings, and potential sources of heterogeneity are poorly understood. We examined the differences in adult earnings of males and females with and without a history of depressive disorder in adolescence, with specific focuses on (1) future earnings in clinical subtypes of adolescent depression; (2) the growth and distribution of earnings over time within these subgroups and (3) the mediating role of subsequent depressive episodes occurring in early adulthood. Data were drawn from the Uppsala Longitudinal Adolescent Depression Study, a community-based cohort study initiated in Uppsala, Sweden, in the early 1990s. Comprehensive diagnostic assessments were conducted at age 16-17 and in follow-up interviews 15 years later, while consecutive data on earnings for the years 1996 to 2016 (ages 20-40) were drawn from population-based registries. The current study included participants with a history of persistent depressive disorder (PDD) (n = 175), episodic major depressive disorder (MDD) (n = 82), subthreshold depression (n = 64) or no depression (n = 218) in adolescence. The association of adolescent depression with earnings in adulthood was analysed using generalised estimating equations. Estimates were adjusted for major child and adolescent psychiatric comorbidities and parental socioeconomic status. The indirect (mediated) effect of depression in early adulthood (ages 19-30) on earnings in mid-adulthood (31-40) was estimated in mediation analysis. The study followed the 'STrengthening the Reporting of OBservational studies in Epidemiology' (STROBE) guidelines. Earnings across early to middle adulthood were lower for participants with a history of a PDD in adolescence than for their non-depressed peers, with an adjusted ratio of mean earnings of 0.85 (0.77-0.95) for females and 0.76 (0.60-0.95) for males. The differences were consistent over time, and more pronounced in the lower percentiles of the earnings distributions. The association was partially mediated by recurrent depression in early adulthood (48% in total; 61% for females, 29% for males). No reduction in earnings was observed among participants with episodic MDD in adolescence, while results for subthreshold depression were inconclusive. Our findings suggest that future earnings of adolescents with depressive disorders are contingent on the duration and natural long-term course of early-onset depression, emphasising the need for timely and effective interventions to avoid loss of human capital.

High School Majors, Comparative (Dis)Advantage, and Future Earnings

This paper studies whether specialized academic fields of study in secondary school (i.e., high school majors), which are common in many countries, affect earnings as an adult. Identification is challenging, because it requires not just quasi-random variation into majors, but also an accounting of individuals’ next-best alternatives. Our setting is Sweden, where at the end of ninth grade students rank fields of study and admission to oversubscribed fields is determined based on a student’s GPA. We use a regression discontinuity design which allows for different labor market returns for each combination of preferred versus next-best choice, together with nationwide register data for school cohorts from 1977-1991 linked to their earnings as adults. Our analysis yields several key results. First, Engineering, Natural Science, and Business yield higher earnings relative to most second-best choices, while Social Science and Humanities result in sizable drops, even relative to non-academic vocational programs. The magnitudes are often as large as the return to two years of additional education. Second, the return to completing a major varies substantially as a function of a student’s next-best alternative. Third, the pattern of returns for individuals with different first and second best choices is consistent with comparative advantage for many field choice combinations, while others exhibit comparative disadvantage or random sorting. Fourth, most of the differences in adult earnings can be attributed to differences in occupation, and to a lesser extent, college major. Taken together, these results highlight that the high school majors students choose at age 16, when they have limited information about their skills and the labor market, have sizable effects which persist into adulthood. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Task Supply, Wage Earning, and Segmentation among Natives and Two Generations of Immigrants

This paper studies the difference in task supplies and economic status between natives and two generations of immigrants. I estimate differences in task supply and earnings between natives and immigrants in 1970 and 2015, which are the beginning and end of the fifth (and current) wave of immigration to Canada. Furthermore, using a three-fold Blinder-Oaxaca decomposition, I link the average weekly wage of workers to their task productivity, and try to find the effects of the returns to tasks as well as different task supplies on the average wage gap between natives and immigrants. Finally, I use ordered probit and logit models to demonstrate and measure the significant effects of immigrant status on an employee's labor market segment.

Between Firm Changes in Earnings Inequality: The Dominant Role of Industry Effects

We find that most of the rising between firm earnings inequality that dominates the overall increase in inequality in the U.S. is accounted for by industry effects. These industry effects stem from rising inter-industry earnings differentials and not from changing distribution of employment across industries. We also find the rising inter-industry earnings differentials are almost completely accounted for by occupation effects. These results link together the key findings from separate components of the recent literature: one focuses on firm effects and the other on occupation effects. The link via industry effects challenges conventional wisdom.

Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major

We investigate the wage return to studying economics by leveraging a policy that prevented students with low introductory grades from declaring the major. Students who barely met the GPA threshold to major in economics earned \$22,000 (46\%) higher annual early-career wages than they would have with their second-choice majors. Access to the economics major shifts students' preferences toward business/finance careers, and about half of the wage return is explained by economics majors working in higher-paying industries. The causal return to majoring in economics is very similar to observational earnings differences in nationally representative data.

Sexual Orientation and Marriage

Using the American Community Survey data 2012-2013, I study married and cohabiting same-sex couples. I show that gay couples exhibit more specialization and less similarity than lesbian couples, while marriage makes gay and lesbian couples more alike than cohabiting couples, in terms of larger earnings differences for lesbians, and more positive sorting by education for gays. Education does not increase the odds of marriage among same-sex couples, contrary to heterosexual couples; lesbians are instead similar to heterosexual couples in their education being negatively associated to the number of children.

Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study.

Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a linear index-known as a polygenic score-are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We present two main sets of results. First, we find evidence that the genetic factors measured by this score interact strongly with childhood socioeconomic status in determining educational outcomes. In particular, although the polygenic score predicts higher rates of college graduation on average, this relationship is substantially stronger for individuals who grew up in households with higher socioeconomic status relative to those who grew up in poorer households. Second, the polygenic score predicts labor earnings even after adjusting for completed education, with larger returns in more recent decades. These patterns suggest that the genetic traits that promote education might allow workers to better accommodate ongoing skill biased technological change. Consistent with this interpretation, we find a positive association between the polygenic score and nonroutine analytic tasks that have benefited from the introduction of new technologies. Nonetheless, the college premium remains a dominant determinant of earnings differences at all levels of the polygenic score. Given the role of childhood SES in predicting college attainment, this raises concerns about wasted potential arising from limited household resources.

Earnings Differences among Senior University Administrators: Evidence by Gender and Academic Field

This study examines earnings inequality by gender and academic field among senior university administrators, including presidents, vice presidents, associate and assistant vice presidents, and deans, using data from the Canadian province of Ontario. While a 4.4 percent earnings gap between male and female administrators is initially identified, much of the gap is explained by earnings inequality across academic fields and by the career experience of the administrators. Administrators who specialize in professional fields such as engineering, health sciences, law, and social work earn between 12 percent and 33 percent more than administrators who specialize in liberal fields in the humanities and social sciences.