Women's Earnings Research Articles

The Gender Wage Gap in Developing Countries

The labor literature documents a gender wage gap between the earnings of men and women in the developed countries but research on the gap in developing countries is less common and usually focuses on individual countries. Research typically identifies a part of the wage gap that is due to observable characteristics, or endowments, and an unexplained part attributable to differences in gender wage equation coefficients sometimes interpreted as gender bias. The focus of recent gender wage gap research has been on understanding how the gender gap varies along the earnings distribution. In this paper, we investigate the determinants of the gender wage gap across 12 developing countries using data from the World Bank’s STEP (Skills Toward Employment and Productivity) Measurement survey that provides information on household demographic characteristics, education and training, employment, and job skills. We apply the classical Blinder-Oaxaca decomposition and combined with quantile regression and also use decomposition methods based on the recentered influence function to obtain distributional decomposition of the wage gap by covariates and by quantiles. Our results show that there are significant gender pay differences that generally decrease with earnings and are mostly due to differences in the intercepts and a slightly offsetting difference in returns to education that are higher for women. The explained part of the gender wage gap, although much smaller, is attributed almost entirely to lower educational level of women and the motherhood penalty. The main conclusion is that improvements in women’s education and training, as well as child friendly labor policies, remain the most important factors that can help to narrow the gender gap in developing countries, which is consistent with previous work.

Labor market dynamics and the migration behavior of married couples

Between 1964 and 2000, the intercounty migration rate of married couples declined by 15%. Concurrently, female labor force participation and the relative wages of women increased. In 1964, 36% of married households had both spouses in the labor force and women earned only 50% of the wages of men. Over the following 36 years, the fraction of dual earner households increased to 75% and women's earnings rose to 64% of men's. Using a two location household level search model of the labor market, we show that both the increase in dual earner households and the rise in women's wages contributed significantly to the decline in the migration rate of married households, with each explaining 55% and 16% of the decline, respectively. In addition, we show that the co-location problem has important implications for estimates of lifetime earnings inequality.

Immigrant earnings returns to post‐migration education: Evidence for Canada, 1999–2013

AbstractUsing the recently created Canadian Employer–Employee Dynamics Database (CEEDD), we analyze the earnings returns to investments in post secondary education by immigrants made after arrival in Canada. Fixed effects estimation results suggest that postsecondary education (PSE) in Canada increases annual earnings of men and women by 21.9% and 32.8%, respectively, for those enrolled full time and by 11.2% and 21.0% for those enrolled part time, respectively. Earnings effects of PSE are larger for immigrants admitted in the skilled worker category relative to family class immigrants and to refugees and are increasing in the level of education of the immigrants at landing. Immigrants from non‐traditional source countries generally have larger returns to PSE than immigrants from English‐language source countries, such as the US and the countries of Northwestern Europe.

Closing the gender pay gap in Canadian medicine.

KEY POINTS The gender pay gap, defined as the difference between what men and women earn for roughly equivalent work, has remained a core challenge in employment equity despite decades of activist effort and the substantial movement of women into the workplace. The Canadian government is taking

First-time mothers and the labor market effects of the earned income tax credit

Abstract The Earned Income Tax Credit (EITC) is one of the largest anti-poverty programs in the United States, providing over $67 billion to more than 27 million families for the tax year 2016, an average of $2,455. By subsidizing the earnings of low-income workers, the EITC reduces poverty both directly through the credit itself and indirectly through labor supply incentives. The two primary determinants of the amount a tax unit receives are earned income and number of children. Many studies define eligibility based on the presence of children in a household and separate analyses by marital status, a reflection of the fundamentally different incentives the EITC poses for single- and dual-earner households. However, as the EITC theoretically encourages fertility and generally discourages marriage, endogenous responses along these two dimensions could bias estimates which rely on them for identification and sample selection. In this paper, I revisit the classic question of the EITC’s labor market effects while exploiting a source of arguably exogenous variation in EITC receipt that does not rely on these potentially endogenous characteristics: birth timing around the end of the calendar year. Using the Survey of Income and Program Participation, my results show positive earnings and employment effects for unmarried women in the 12 months following their first/only child’s birth, including for those with a high school degree or less (low-ed). Overall, the results are usually small and insignificant for married women, with the exception of negative (and sometimes significant) effects on earnings for low-ed married women. Using a difference-in-discontinuities approach, I separate the income effect of the credit itself from the information effect, which, I argue, occurs when women receive the EITC for the first time. I show that, while the income effect is negative across all groups of women, the information effects are positive for unmarried women and negative for married women, again consistent with theory and the body of evidence on the EITC.

Gender role attitudes and male-female income differences in China

By investigating deep-rooted cultural norms, this paper explores whether and how traditional gender role attitudes impact income gaps between men and women and identifies causal effects via instrumental variable and other causal inference methods. Based on data from the Chinese General Social Survey in 2013, the results show that traditional gender role attitudes have a strong negative effect to the earnings of women but have no significant effect on men’s incomes. Through Oaxaca-Blinder decomposition, this research finds that the different effects of gender role attitudes on the incomes of men and women appear to play a prominent role in causing the gender gap in earnings. In addition, gender role attitudes have an indirect and broad effect on gender income inequality through educational attainment, labor force participation, working hours, and occupational status. These results provide us with a new perspective for understanding the persistence and mechanisms of gender income stratification under educational equalization and have implications for gender equality policies.

Enabled to work: The impact of government housing on slum dwellers in South Africa

Do informal housing conditions constrain labour supply? I estimate the effect of receiving a free house under the South African government’s housing program, which has given away over 3 million housing units since 1994. Using four waves of household panel data from Cape Town and geographical data on the location of large housing projects, I exploit a natural experiment whereby households living close to projects were first in line to get them to instrument for selection into the programme. I use projects that were planned and approved, but never actually built, to deal with non-random placement of housing projects. Government housing has a significant positive effect on household earnings. This is driven primarily by increases in earnings for women. I present evidence consistent with a mechanism whereby formal housing frees up time by alleviating the demands of work in the home.

Does early childbearing matter? New approach using Danish register data

It is widely expected that career interruptions related to childbearing affect mothers’ wages directly through changes in the formation of human capital. Research proposes that this effect is exceptionally strong for early childbearing women who are about to start their working careers. This study investigates whether the poor long-term labor market outcomes experienced by women who first gave birth before turning 25 reflect previously existing disadvantages or are a consequence of the timing of childbearing. The purpose is also to observe whether a new combination of the best identification practices from earlier studies serves as an improved estimation method. This is done by applying a within-family estimator while treating miscarriages as an exogenous variation, thereby addressing family and individual heterogeneity, which might have biased earlier results based on either of the two identification strategies alone. The results show that early childbearing has no long-term effects on women's earnings.

Legal Access to Reproductive Control Technology, Women’s Education, and Earnings Approaching Retirement

What do historical changes in legal access to reproductive health care technology tell us about the long-run effects of such changes? We investigate this question using data from the Health and Retirement Study and an identification strategy leveraging variation in exposure to legal changes in access across cohorts born in the same states. We find positive effects on educational attainment that align with prior work but are not statistically significant. We also find positive effects on working in a Social Security-covered job in women's 20s and 30s but no evidence of positive effects on women's earnings in their 50s.

Influence of height on likelihood of employment, occupational sorting, and earnings in 27 post-communist countries.

We study the influence of height on labour market outcomes using micro-data from a recent survey that cover 27 post-communist countries. Specifically, we focus on the influence of height on three dimensions of labour market outcome: (1) likelihood of employment, (2) occupational sorting, and (3) earnings. We use micro-data from 2016 Life-In-Transition survey (LITS) which was jointly conducted by the European Bank for Reconstruction and Development and the World Bank. We run several types of regression to show how height influences (1) likelihood of employment, (2) occupational sorting, and (3) earnings. When controlling for a comprehensive set of covariates, for each 10 cm increase in height, the probability of getting a job increases by 1% points for males and by 3 for females. Equally, for each 10 cm increase in height, the probability of getting a job increases by 2% points in urban areas and rural areas. Our findings demonstrate that taller women and men are more likely: (a) being an employer rather than an employee; (b) to be employed in higher-paid and more prestigious sectors of finance, insurance, and real estate; (c) to be employed in private enterprises. Finally, when occupational sorting and socio-demographics are controlled for, a 10 cm increase in height results in a 5% increase in earning for men, and a 12% increase in earnings for women. Using a diverse sample of 27 post-communist countries, we found that taller individuals have better labour market outcomes in terms of employment, occupational sorting, and earnings.

Examining the Impact of Early Childbearing on Labor Outcomes in Brazil

We examined the labor-market participation, participation in formal jobs, and earnings of women who bore a child during their adolescent years. A woman’s decision to bear a child is influenced by such factors as her motivation and her own assessment of her productivity and labor-market returns, factors that also affect her labor outcome. Aware of the endogeneity of childbearing, we used Brazilian National Health Survey data (2013) to examine such instruments as age at menarche and miscarriage. Our results showed an increase of nine to eleven percentage points in labor participation as a result of early pregnancy and a decrease of twelve percentage points in participation in formal jobs. In low-income families, women enter the labor force to support their children and maintain family income, though they tend to select into more flexible, low-skilled, informal jobs. One of the mechanisms through which teenage pregnancy affects labor participation and earnings was education. Early pregnancy decreased women’s education by 1.3 years, and we observed a negative impact of early pregnancy on earnings of close to 28%. We analyzed impacts for different racial groups, income, and region of residence.

Discriminate me — If you can! The disappearance of the gender pay gap among public‐contest selected employees in Italy

This article investigates the effect of public‐contest recruitment on earnings for men and women using Italian microdata over a time period of ten years. We find that the gender pay gap vanishes, and even reverses among young employees when they are selected through public contests. The results suggest that selection mechanisms like public contests may offer a way for merit‐based and gender‐fair wage‐setting. However, since public contests and the public sector are highly correlated, we analyse the gender pay gap by taking into account both the connection between the public and private sector and the open contest issue. By decomposing our results by sector, we find that public contests are a necessary but not sufficient condition for merit‐based and gender‐fair recruitment. Similarly, the institutional environment of the public sector is a necessary but not sufficient condition for ensuring that public contests are merit‐based and gender‐fair screening devices. Taken together, these two factors cause the gender pay gap to disappear.

Economic returns to adult vocational qualifications

ABSTRACTSome countries have certifying institutions for competence acquired at the workplace. These institutions provide incentives for workplace training that may have favourable effects on productivity, earnings and labour market participation. We present evidence on the earnings effects of attaining vocational qualifications in adulthood through two alternative routes: (1) apprenticeship and (2) recognition and testing of vocational competence acquired through relevant work experience. Drawing on longitudinal administrative data from Norway and tracking the labour market careers of individuals without completed upper secondary education by age 25, we estimate the impacts of acquiring vocational qualifications on future labour earnings. To allow for differential labour market trajectories of those who do and do not acquire qualifications, we account for unobserved individual heterogeneity in both levels and earnings growth. Without a rich representation of unobserved heterogeneity, estimated earnings effects are exaggerated. We find that vocational qualifications from both the apprenticeship and the experience-based routes boost earnings of men and women. Certification of already acquired skills has some value in itself, but adult apprenticeships have more positive effects on future earnings, as they involve greater individual skills development.

Does Empathy Pay? Evidence on Empathy and Salaries of Recent College Graduates

This paper examines linkages between empathy and salaries of recent college graduates. While it has been suggested that greater empathy enhances performance because empathic individuals work well with others and are good leaders, it is also possible that they will be less productive due to lower motivation to compete for pecuniary rewards or because they are considered to be too accommodating. Also, more empathic individuals may choose occupations that are more socially oriented and less well paid. We find a large, significant negative relationship between empathy and earnings for both men and women. While we cannot pinpoint the cause for this strong correlation or reach conclusions about causation, we find that empathic individuals choose college majors and sectors of employment that pay less. However, gender, major, and sector together do not account for the full negative relationship between empathy and salaries. While it seems likely that preferences lead more empathic people to choose lower paying occupations, we cannot eliminate the possibility that greater empathy has a negative effect on productivity.

Genderizing fisheries: Assessing over thirty years of women's participation in Alaska fisheries

This study examines the dynamics of women's engagement in Alaska commercial fisheries including their roles within fishing families, the evolution of women's participation, perceptions of equity and access, and the effects of gender traditionalism. Such gendered effects of changes in ecological, social, economic, and management conditions need to be understood in order to mitigate biases and unintended consequences. Women's engagement in Alaska fisheries was examined using a combination of quantitative analysis of 30 years of harvest data, and qualitative analysis of 7 focus groups. Women's participation in Alaska commercial fisheries parallels trends and influences documented around the world. This participation is highly responsive to and bound by family conditions and is influenced by gender stereotypes, taboos, norms, and harassment. Although study participants perceived that opportunities for women had increased in Alaska fisheries, examination of harvest data showed men continue to dominate the industry. Women play the key adaptive role in fishing families, entering and exiting fisheries in response to changing conditions, especially when having children. This responsiveness may marginalize women in fisheries as the increasing institution of catch share and limited entry programs entitles a set of participants usually on the basis of fishing history and often increases the price of entry into those fisheries. Moreover, fisheries earnings for women are highly concentrated in salmon, which exacerbates their economic vulnerabilities in the face of decreasing diversification opportunities. Thus the dynamics of women's fisheries participation is an important lens for evaluating potential policy effects and is one that necessitates continued research.

When migrant women return: Gender role re-configurations in Sri Lankan households

ABSTRACTThe earnings of Sri Lankan migrant women who work abroad as housemaids account for a significant proportion of overseas remittances to Sri Lanka. Literature on the “maid trade” of Sri Lanka shows that migrant women, 70% of whom are mothers, become primary wage earners for their left behind households. Central to this study is a focus on how the gendered construction of “breadwinner” and “mothering” plays out when left behind families are dependent on these women’s earnings for survival. Based on ethnographic data, it demonstrates that this results not in a reversal but in a reconfiguration of gendered roles in households.

The Effect of Task Choice and Task Assignment on the Gender Earnings Gap: An Experimental Study

Previous studies explain the gender earnings gap by gender differences in choosing competitive and higher-paying jobs. However, little is known about whether and how women's earnings are affected when they choose more challenging jobs. In this study, we use a novel identification strategy to investigate 1) how the gender earnings gap arises from individuals' self-selecting into different tasks and 2) whether mobilizing women to work on the tasks typically preferred by men increases women's earnings and decreases the earnings gap. Our results show that men who prefer the hard and higher-paid task are more likely to obtain higher earnings regardless of the task they are assigned. In contrast, we find that women obtain higher earnings when they work on a hard and higher-paid task even if their initial take choice is the easy and lower-paid one. Our findings are consistent and robust across task stereotypes. Our results imply that mobilizing women to work on more challenging and rewarding tasks is likely to reduce the gender earnings gap.

Abstracts

Abstracts

Economic Engagement of Mothers: Entrepreneurship, Employment, and the Motherhood Wage Penalty

The economic value women bring to their own households and to the broader economy is well-documented. In fact, nearly all of the economic gains that have occurred among middle-class families since 1970 have come from the increased earnings of women. Mothers make substantial contributions to the finances of many families and households. In 2018, nearly half of the more than 30 million families with children under 18 in the United States had either a single mother or a married mother contributing at least 40% of a couple’s joint earnings.

The kids are alright - labour market effects of unexpected parental hospitalisations in the Netherlands

Unexpected negative health shocks of a parent may reduce adult children's labour supply via informal caregiving and stress-induced mental health problems. We link administrative data on labour market outcomes, hospitalisations and family relations for the full Dutch working age population for the years 1999-2008 to evaluate the effect of an unexpected parental hospitalisation on the probability of employment and on conditional earnings. Using an event study difference-in-differences model combined with coarsened exact matching and individual fixed effects, we find no effect of an unexpected parental hospitalisation on either employment or earnings for Dutch men and women, and neither for the full population nor for the subpopulations most likely to become caregivers. These findings suggest that the extensive public coverage of formal long-term care in the Netherlands combined with widespread acceptance of part-time work provides sufficient opportunities to deal with adverse health events of family members without having to compromise one's labour supply.