Earnings Gap Research Articles

Educational Variations in Cohort Trends in the Black-White Earnings Gap Among Men: Evidence From Administrative Earnings Data.

Despite efforts to improve the labor market situation of African Americans, the racial earnings gap has endured in the United States. Most prior studies on racial inequality have considered its cross-sectional or period patterns. This study adopts a demographic perspective to examine the evolution of earnings trajectories among white and black men across cohorts in the United States. Using more than 40 years of longitudinal earnings records from the U.S. Social Security Administration matched to the Survey of Income and Program Participation, our analyses reveal that the cohort trends in the racial earnings gap follow quite different patterns by education. Race continues to be a salient dimension of economic inequality over the life course and across cohorts, particularly at the top and the bottom of the educational distribution. Although the narrowing of the racial gap among high school graduates is in itself a positive development, it unfortunately derives primarily from the deteriorating economic position for whites without a college degree rather than an improvement in economic standing of their black counterparts.

The Long-Term Effects of Long Terms – Compulsory Schooling Reforms in Sweden

AbstractWe evaluate the impact on earnings, pensions, and further labor market outcomes of two parallel educational reforms increasing instructional time in Swedish primary school. The reforms extended the annual term length and years of compulsory schooling by comparable amounts. We find striking differences in the effects of the two reforms: at 5% the returns to the term length extension were sizeable and benefited broad ranges of the population. The compulsory schooling extension had small (2%) albeit significant effects, which were possibly driven by an increase in post-compulsory schooling. Both reforms led to increased sorting into occupations with heavy reliance on basic skills and the term extension reduced the gender gap in employment and earnings.

Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State

AbstractUsing survey data from the German Socio‐Economic Panel (SOEP), this paper analyses the extent to which alternative income sources, reactions within the household context, and redistribution by the state attenuate earnings losses after job displacement. Applying propensity score matching and fixed effects estimations, we find that income from self‐employment reduces the earnings gap only slightly and severance payments buffer losses in the short run. On the household level, we find little evidence for an added worker effect whereas redistribution by the state within the tax and transfer system mitigates income losses substantially.

Family Life Courses, Gender, and Mid-Life Earnings

AbstractThere is a long-standing debate on whether extensive Nordic family policies have the intended equalizing effect on family and gender differences in economic outcomes. This article compares how the combination of family events across the life course is associated with annual and accumulated earnings at mid-life for men and women in an egalitarian Nordic welfare state. Based on Finnish register data (N = 12,951), we identify seven typical family life courses from ages 18 to 39 and link them to mid-life earnings using sequence and cluster analysis and regression methods. Earnings are highest for the most normative family life courses that combine stable marriage with two or more children for men and women. Mid-life earnings are lowest for unpartnered mothers and never-partnered childless men. Earnings gaps by family lives are small among women but sizeable among men. Gender disparities in earnings are remarkably high, particularly between men and women with normative family lives. These gaps between married mothers and married fathers remain invisible when looking only at motherhood penalties. Results further highlight a large group of (almost) never-partnered childless men with low earnings who went largely unnoticed in previous research.

Labor market dynamics and black–white earnings gaps

Earnings gaps between black and white workers have widened over the past 30–40 years. This increase is not explained by differences in observed demographics or the industry and occupational composition of employment. We suggest that variation in labor market dynamics between black and white workers are important. Disparities in job switching, job loss, and associated wage growth result in flatter career wage profiles for black workers and widening earnings gaps over the work life.

Earnings among people with multiple sclerosis in Sweden, by education and occupation

Abstract Background Multiple sclerosis (MS) may affect the individual’s working life. We aimed to 1) investigate the mean levels and distributions of earnings among people with MS (PwMS) before and after MS diagnosis compared to people without an MS diagnosis, and whether such differences in earnings were associated with educational level or occupation and 2) assess the prevalence of sickness absence (SA) and disability pension (DP). Methods Population-based cohort study (10 years prior to 5 years after MS diagnosis) using microdata linked from nationwide Swedish registers of all individuals aged 30-54 with MS diagnosed in 2003-2006 (n = 2553) and references without MS (n = 7584) randomly selected by stratified matching (sex and age). Annual mean earnings, by educational level and type of occupation, were compared with t-tests. Tobit regressions investigated the associations of earnings with individual characteristics. Lastly, the proportions on SA and DP, stratified by educational level and type of occupation, were examined in the diagnosis year and 5 years later. Results Differences in earnings between PwMS and references were observed beginning one year prior to diagnosis and increased with time. PwMS had lower mean earnings for the diagnosis year (difference=SEK 28,000, p-value<0.05), and the difference had more than doubled (p-value<0.05) 5 years later. These differences remained after taking educational level and type of occupation into account. PwMS with university education and/or more qualified occupations had mean earnings most like their respective references’. PwMS had higher prevalence of SA and DP than the references, in both the diagnosis year and 5 years later. Conclusions Earnings of people with MS were lower than references’ already one year before diagnosis, and the gap increased thereafter. Results indicate that educational level and type of occupation are of importance for earnings. Moreover, SA and DP were more common among people with MS. Key messages Our results indicate that working-aged people with MS have less earnings than references already one year before diagnosis and that thereafter this gap in earnings increases with time. Education and occupation were influential in explaining the people with MS’ heterogeneous earnings, with a hierarchal ordering of who maintained similar earnings to their respective peers.

Women, assets, and formal savings: A comparative analysis of Ecuador, Ghana and India

AbstractMotivationSavings are an important but often overlooked component of financial inclusion. While women are less active than men in the formal financial sector there is little understanding about their ability to accumulate savings.PurposeWe hypothesize that a woman’s individual economic status, measured by her property ownership, is an important driver of her ability to save.Approach and MethodsWomen are considered as savers in the formal sector only if they have savings above a minimum threshold. Three measures of women’s asset ownership are used: two capture their absolute property status and one their relative status in the household. The data are obtained from three large‐scale surveys that collected individual‐level asset data in Ecuador, Ghana and the Indian state of Karnataka. Logistic regression models are employed to examine the relationship between women’s property ownership and accumulation of savings.FindingsThe absolute value of a woman’s physical assets and her share of household physical wealth are correlated with being able to accumulate formal savings. Women’s relative wealth status is more strongly related to their savings, along with education, paid employment and group membership.ConclusionsWomen’s intrahousehold status, defined by their relative wealth, is critical to determining their ability to save in formal accounts.Policy ImplicationsInterventions that boost women’s bargaining power, by increasing their property ownership, should be encouraged, along with greater efforts to improve girls’ access to quality education. Functional literacy training for older women can both reduce barriers to accessing financial institutions and create awareness of their benefits. Constraints to women’s participation in the labour force should be removed in tandem with interventions to reduce gender earnings gaps.

Sex-Based Disparities in the Hourly Earnings of Surgeons in the Fee-for-Service System in Ontario, Canada

Sex-based income disparities are well documented in medicine and most pronounced in surgery. These disparities are commonly attributed to differences in hours worked. One proposed solution to close the earnings gap is a fee-for-service payment system, which is theoretically free of bias. However, it is unclear whether a sex-based earnings gap persists in a fee-for-service system when earnings are measured on the basis of hours worked. To determine whether male and female surgeons have similar earnings for each hour spent operating in a fee-for-service system. This cross-sectional, population-based study used administrative databases from a fee-for-service, single-payer health system in Ontario, Canada. Surgeons who submitted claims for surgical procedures performed between January 1, 2014, and December 31, 2016, were included. Data analysis took place from February 2018 to December 2018. Surgeon sex. This study compared earnings per hour spent operating between male and female surgeons and earnings stratified by surgical specialty in a matched analysis. We explored factors potentially associated with earnings disparities, including differences in procedure duration and type between male and female surgeons and hourly earnings for procedures performed primarily on male vs female patients. We identified 1 508 471 surgical procedures claimed by 3275 surgeons. Female surgeons had practiced fewer years than male surgeons (median [interquartile range], 8.4 [2.9-16.6] vs 14.7 [5.9-25.7] years; P < .001), and the largest proportion of female surgeons practiced gynecology (400 of 819 female surgeons [48.8%]). Hourly earnings for female surgeons were 24% lower than for male surgeons (relative rate, 0.76 [95% CI, 0.74-0.79]; P < .001). This disparity persisted after adjusting for specialty and in matched analysis stratified by specialty, with the largest mean differences in cardiothoracic surgery (in US dollars: $59.64/hour) and orthopedic surgery ($55.45/hour). There were no differences in time taken by male and female surgeons to perform common procedures; however, female surgeons more commonly performed procedures with the lowest hourly earnings. Even within a fee-for-service system, male and female surgeons do not have equal earnings for equal hours spent working, suggesting that the opportunity to perform the most lucrative surgical procedures is greater for men than women. These findings call for a comprehensive analysis of drivers of sex-based earning disparities, including referral patterns, and highlight the need for systems-level solutions.

Expanding Understanding of Motherhood Penalty: How Gaps in Family Policies Contribute to Gaps in Old-Age Earnings in Russia.

This study identifies policy shortcomings in the structure of Russian family policies and old-age pension calculations and shows how gaps in coverage contribute to the motherhood penalty in Russia. I first show that shortages in access to affordable childcare contribute to mothers' involuntary labor market inactivity leading to loss in earnings. I then discuss how childcare breaks are treated in terms of pensionable experience and present simulation of pension outcomes to show the negative impact of long childcare breaks on mothers' pensions.

A machine learning approach to improving occupational income scores

Historical studies of labor markets frequently lack data on individual income. The occupational income score (OCCSCORE) is often used as an alternative measure of labor market outcomes. We consider the consequences of using OCCSCORE when researchers are interested in earnings regressions. We estimate race and gender earnings gaps in modern decennial Censuses as well as the 1915 Iowa State Census. Using OCCSCORE biases results towards zero and can result in estimated gaps of the wrong sign. We use a machine learning approach to construct a new adjusted score based on industry, occupation, and demographics. The new income score provides estimates closer to earnings regressions. Lastly, we consider the consequences for estimates of intergenerational mobility elasticities.

The impact of earnings gaps and networks on migration decisions: an empirical study of undocumented Mexican migrants

This study shows that the effects of earnings differentials, ethnic networks, and herd behavior on migration decisions are more nuanced than the existing literature suggests. Our conclusion stems from the analysis of the geographic and occupational choices of undocumented Mexican migrants to the USA. We apply mixed logit and latent class methods to data from a survey based on interviews with Mexican nationals at border towns inside Mexico. While better-educated migrants favor occupations and places with higher earnings gaps, migrants with little schooling behave the opposite way. We also find that educational attainment is an important driver of network effects. The preferences of less educated migrants with regard to network size show the traditional inverted U-shape pattern, but the behavior of individuals with more education is consistent with a U-shape pattern instead. Another conclusion that stems from our empirical results is that the herd effect can be positive or negative, depending on migrants’ occupational choices.

Gender Inequalities in Early Career Trajectories and Parental Leaves: Evidence from a Nordic Welfare State

Parental leaves are, besides unemployment, the main reason for career breaks in early career. Despite the progress in recent decades towards more equal sharing of childcare between mothers and fathers, the labour market risk due to parenting remains mainly with women. In this article, we analyse how parental leaves relate to early career trajectories of young Finnish men and women. Using longitudinal register data for 2005–2016 from the Finnish Centre for Pensions, we perform a multi-trajectory analysis of the labour market attachment of a cohort born in 1980. Based on working days and earnings, we find five distinct career trajectories for both men and women, with the majority being well attached to the labour market by their mid-30s. While men and women on average have similar employment lengths, the gender gap in earnings is already 30 per cent in this early career phase. One of the causes may be found in the highly unequal division of family-related career breaks; the duration of mothers’ family-related leaves in this cohort was 13 times longer than fathers’ leave spells. Long home care leaves were particularly common among mothers with low education levels and weak attachment to the labour market. Efforts towards a more equal division of parental leaves are needed in order to combat gender inequalities that already emerge in early career and potentially cause life-long disadvantages for women’s careers, earnings and pensions.

Employment and Wage Gaps Among Recent Canadian Male and Female Postsecondary Graduates

Level of postsecondary schooling and field of study remain significant markers of social stratification. However, the extent to which these various types of postsecondary schooling influence the labor market outcomes of recent male and female graduates is unknown. Drawing on data from Statistics Canada’s 2013 National Graduates Survey, we examine the employment status and gender gap in earnings among recent Canadian male and female graduates at different levels of postsecondary education and various fields of study, three years after graduation. The findings indicate substantial gender disparities in employment status across all types of postsecondary education. The gender gap in earnings is highest among trades and community college graduates, but effectively disappears for graduates with earned doctorate degrees. With respect to field of study, the gender wage gap is smallest among liberal arts graduates and largest among graduates with math-, computer science-, or engineering-related credentials. The policy implications associated with these findings should be of interest to international researchers as pay equity among men and women in the workforce remains a priority for all OECD countries.

El impacto del salario mínimo y del empleo informal sobre el ingreso salarial en México

La presente investigación aborda el tema del impacto del salario mínimo y del empleo informal sobre las diferencias del ingreso salarial. Bajo este propósito, se plantea un Modelo de Censura que emplea datos codificados para un subconjunto de la población. La estimación del modelo se realizó con dos técnicas econométricas: Mínimos Cuadrados Ordinarios (MCO) con efectos fijos y el Método Generalizado de Momentos (GMM). En ambos casos, se emplearon microdatos de la ENOE por entidad federativa para el periodo 2005‑2014. Los resultados revelan que el salario mínimo amplia la brecha del ingreso salarial, mientras que el sector informal tiene un efecto reductor sobre las diferencias del ingreso salarial.

Occupational Demand, Cumulative Disadvantage, and Gender: Differences in University Graduates’ Early Career Earnings

A number of mechanisms contribute to the gender earnings gap – both its level and trends in it. We focus on three of them: occupational demand, the cumulation of disadvantage that originates in the unequal domestic division of labour, and labour market statuses which also may originate in the domestic division of labour. We show that changes in occupational demand associated with the dot-com boom and what followed it have caused substantial shifts in the relative earnings of young male and female university graduates. We provide evidence of how one consequence of the domestic division of labour – differences in hours worked by gender - contribute to the size and growth of the female earnings disadvantage. And, even in our generally young sample, human capital accumulation is more likely to be disrupted for women than for men. We identify several methodological and substantive implications of our results.

Quantitative Strategy Based on Decision Tree and Bollinger Band

Because stock investors often invest blindly and emotionally, and the quantitative investment strategy is more rational and reliable, so the purpose of this paper is to establish a suitable quantitative strategy for investors. We selected six indicators as stock price forecasting indicators, constructed the model by using CART algorithm, Mallat algorithm and Brin Belt index.The test results show that the earnings gap of the multi-short portfolio of the modified model is significantly increased, reaching the level of 3%. Combining with the timing strategy of Brin Belt, the total earnings can exceed the average earnings of technology stocks by 3.3%.

Understanding and improving gender equity in conservation

ABSTRACTThis paper examines data from two AIC/FAIC compensation surveys to look at evidence for pay disparities between men and women in conservation. In addition to identifying widespread and pervasive gender-based gaps in earnings, it also highlights and discusses evidence for two additional types of inequity, the glass ceiling and glass escalator effects. To explain how these types of inequity are created and maintained, three decades of research in the fields of sociology, labor economics, and business management are summarized, and special attention is given to the mechanisms of gender discrimination in occupations dominated by women. To provide context for understanding the gender composition of conservation in the United States, the paper also explores how fields become sex-segregated and how the same biases that lead to occupational sex-segregation contribute to devaluing the work of women. To conclude, it summarizes evidence-based research into strategies for combatting gender inequities in workplaces.

Higher education enrolment in Bangladesh: does the wage premium matter?

ABSTRACTThis paper empirically examines the decisions of individuals to enrol in a course of tertiary education in Bangladesh, focussing on the period 1999 to 2009. Of particular interest is whether the wage premium―the gap in wage earnings between tertiary and secondary school graduates―is associated with decisions to enrol in tertiary education. The analytical framework used here is the human capital theory, which is tested through a discrete choice model. Using data from Bangladesh Labour Force Surveys, empirical results suggest that the wage premium is positively associated with decisions of males to enrol in tertiary education, while for females there appears to be no such association. A battery of robustness tests supports our results.

Migrant earnings gaps in Gulf Cooperation Council countries: Employers' perceptions or opportunity costs?

AbstractThis article discusses earnings differentials among skilled Western, Arab and Asian migrants, who constitute most of the private sector labour force in Gulf Cooperation Council (GCC) countries, during the period 2012–14. Using two standard decomposition methodologies, it investigates the view that Westerners are paid premium rates due to the unobserved perceptions of private employers. The results indicate that while one‐third to three‐quarters of real hourly earnings differentials are attributable to differing observed levels of productivity‐related characteristics, the remainder are due to the incorporation of higher opportunity costs for Westerners into the bargaining process. The potential effect of unobserved perceptions is found to be irrelevant to observed earnings differentials.

From the Ground Up

Self-employment is an important component of many development strategies aiming to enhance earnings and employment among low-income populations. However, women tend to earn less than men through self-employment, calling into question the effectiveness of self-employment as a tool for bolstering women's earnings. In this paper, we identify a novel intervention that boosts women's returns from self-employment and narrows the gender earnings gap in an informal, residential market. We argue that micro-spatial resources offer gender-specific advantages to female business owners. We show how gendered constraints on women's labor market activity intersect with spatial resources to influence their likelihood of running a business and their self-employment earnings. Using data from a Colombian public housing complex, we find that the randomly assigned location of a resident's apartment significantly influences women's business activity, but not men's. Women who run informal, home-based businesses from favorable locations earn more than twice as much as comparable women, narrowing the gender earnings gap by 58.5% and earning an income that lifts them above the poverty line. This study offers a new perspective on how gender and micro-geography intersect to shape self-employment. More broadly, it reveals how an important but often-overlooked factor, micro-spatial variation, influences economic development.