The link between paid parental leave generosity and a larger gender pay gap-updated
09 Nov 2014 4 Comments
in discrimination, economics, gender, human capital, labour economics, labour supply, occupational choice Tags: gender pay gap, labour economics, occupation choice, sex discrimination
But it also turns out that some countries that offer more liberal parental leave policies have higher pay gaps among men and women ages 30 to 34, according to analyses of 16 countries conducted by the Organization for Economic Cooperation and Development.
OECD theorizes that this link may be driven by the fact that women are more likely than men to actually use their parental leave, and that time out of the workforce is associated with lower wages.
It is rather obvious if you pay women not to work, they will accumulate less job experience and miss out on promotional and other career advancement opportunities in their prime of their career.
As this OECD paper in 2012 found with regard to paid parental leave and gender gaps in employment and earnings:
…the provision and gradual lengthening of paid leave have contributed to a widening in the gender pay gap of full-time employees.
This may reflect the fact that women experience slower career and earnings progression on returning from leave to full-time employment than men, much fewer of whom take leave.
In sum, the development of parental leave policies in most countries appears to have had a positive, albeit marginal, role in the rise of female employment, although women pay a price in the form of reduced earnings progression.
Claudia Golden found that in some high-powered professions, any career interruption at all, can greatly reduce lifetime earnings.
via The link between parental leave and the gender pay gap | Pew Research Center.
The day that sex discrimination died – Solomon Polachek on the gender wage gap
04 Nov 2014 1 Comment
in discrimination, gender, human capital, labour economics, occupational choice Tags: asymmetric marriage premium, Gary Becker, gender wage gap, habits and traditions, human capital, labour economics, motherhood penalty, sex discrimination, Solomon Polachek
Solomon Polachek was minding his own business back in 1975 looking for evidence to show occupational crowding and that women were pushed into low paid occupations by sex discrimination, and in particular, employer discrimination. About 60 per cent of women still work in just 10 occupations. the occupations which are female-dominated are often relatively poorly paid jobs
By chance, Polachek departed from the usual empirical strategy for estimating the male-female wage gap at that time.
Rather than include a dummy variable to estimate discrimination after various factors have been taken into account, he introduced dummy variables that took account of both gender and marital status. His results were startling.
He previously was able to explain about 35% of the wage gap using the data at hand and variables he was using.
This 35% gap dropped to 18% for single never married males and females, but his ability to explain the gender wage gap increased dramatically to over 60% for married spouse present males and females.
What more, the presence of children exacerbated the gender wage gap. Each child of less than 12 years old widened the female male pay disparity by 10%. Furthermore, large spacing intervals between children widened this gender wage disparity even further.
Subsequent research showed that marital status had the same effects on gender wage gaps in Germany, the UK, Austria, Switzerland, Sweden, Norway and Australia. Factors associated with dropping out of the labour market to care for children could explain up to 93% of the gender wage gap.
These findings are devastating to the notion that there is some sort of discrimination against women on the demand side of the labour market. As Polachek explains:
The gender wage gap for never marrieds is a mere 2.8%, compared with over 20% for marrieds. The gender wage gap for young workers is less than 5%, but about 25% for 55–64-year-old men and women.
If gender discrimination were the issue, one would need to explain why businesses pay single men and single women comparable salaries. The same applies to young men and young women.
One would need to explain why businesses discriminate against older women, but not against younger women. If corporations discriminate by gender, why are these employers paying any groups of men and women roughly equal pay?
Why is there no discrimination against young single women, but large amounts of discrimination against older married women?
… Each type of possible discrimination is inconsistent with negligible wage differences among single and younger employees compared with the large gap among married men and women (especially those with children, and even more so for those who space children widely apart).
The main drivers of the gender wage gap is simply unknown to employers such as whether the would-be recruit or employer is married, their partner is present, how many children they have, how many of these children are under 12, and how many years are there between the births of their children. These are the main drivers of the gender wage gap – all of which are factors totally unknown to employers and of no relevance to them in making a profit.
https://www.youtube.com/watch?v=LudmHUms-g4
The drivers of the gender wage gap on the supply side of the labour market regarding the choices women make about having children, when they have children, and how this influences their investment in human capital, and in particular, in human capital that does not depreciate by that much because of intermittent labour force participation due to motherhood.
Occupational crowding hypotheses of the gender wage gap have the drawback of being an invisible hand explanation of social outcomes. Each individual, acting only to best secure her own rights and interests, act in such a way that the unintended outcome of a complex social interaction.
The specific unintended outcome that must arise from millions of choices of people acting in their own interest throughout their lives is occupational segregation.
The market process of the invisible hand has both a filter and and equilibrating mechanism. The filter is profits and loss to exclude through insolvency and bankruptcy those entrepreneurial choices that do not further consumer’s interests. The equilibrating mechanism – the mechanism that tells people which choices they should make – is price signals. Price signals guide individual choices towards the unintended outcome.
Those that argue that women are socialised to make particular choices such as mother were not paying attention to the 20th century and the radical social change over the course of that century, in particular in the role of women. As Gary Becker explains:
… major economic and technological changes frequently trump culture in the sense that they induce enormous changes not only in behaviour but also in beliefs.
A clear illustration of this is the huge effects of technological change and economic development on behaviour and beliefs regarding many aspects of the family.
Attitudes and behaviour regarding family size, marriage and divorce, care of elderly parents, premarital sex, men and women living together and having children without being married, and gays and lesbians have all undergone profound changes during the past 50 years.
Invariably, when countries with very different cultures experienced significant economic growth, women’s education increased greatly, and the number of children in a typical family plummeted from three or more to often much less than two.
Pop Stars Actually Do Die Too Young – The Atlantic
30 Oct 2014 Leave a comment
in economics of media and culture, health and safety, labour economics, occupational choice Tags: compensating differentials, labour economics, music
Why the Gender Pay Gap is a Myth
29 Oct 2014 Leave a comment
in discrimination, gender, health and safety, human capital, labour economics, labour supply, occupational choice Tags: employment discrimination, gender wage gap, labour economics, sex discrimination
Men are far more likely to choose careers that are more dangerous, so they naturally pay more under the principle of compensating differences. Top 10 most dangerous jobs: Fishers, loggers, aircraft pilots, farmers and ranchers, roofers, iron and steel workers, refuse and recyclable material collectors, industrial machinery installation and repair, truck drivers, construction labourers. They are male-dominated jobs.
Men are far more likely to enter higher-paying fields and occupations (by choice). Men are far more likely to take work in uncomfortable, isolated, and undesirable locations that pay more. Men work longer hours than women do. The average fulltime working man works 6 hours per week or 15 percent longer than the average fulltime working woman.
Women tend to work in fields dominated by women because these fields best satisfy women’s’ dual careers as workers and household managers. This can include less stressful work environments (noise, strenuous activity, etc.), more flexible policies regarding time off, and a number of other factors.
Men work longer hours than women do. The average fulltime working man works 6 hours per week or 15 percent longer than the average fulltime working woman. Even within the same career category, men are more likely to pursue high-stress and higher-paid areas of specialisation.
Despite all of the above, unmarried women who’ve never had a child actually earn more than unmarried men. In 2008, single, childless women between ages 22 and 30 were earning more than their male counterparts in most U.S. cities, with incomes that were 8% greater on average.
Women business owners make less than half of what male business owners make, which, since they have no boss, means it’s independent of discrimination. The reason for the disparity is money is the primary motivator for 76% of men versus only 29% of women. Women place a higher premium on shorter work weeks, proximity to home, fulfillment, autonomy, and safety.
Women lean toward jobs with fewer risks, more comfortable conditions, regular hours, more personal fulfillment and greater flexibility. Many women are willing to trade higher pay for other desirable job characteristics.
Men often take on jobs that involve physical labour, outdoor work, overnight shifts and dangerous conditions (which is why men suffer the overwhelming majority of injuries and deaths at the workplace). They choose to put up with unpleasant factors because they can earn more.
An Analysis of Reasons for the Disparity in Wages Between Men and Women for the U.S. Department of Labor in 2009 concluded that:
This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action.
Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.
The Character Factory – NYTimes.com
28 Oct 2014 Leave a comment
in human capital, labour economics, liberalism, occupational choice Tags: labour economics, Personality traits
The impact of street capital on the labour market prospects of inner-city youth
15 Oct 2014 Leave a comment
in human capital, labour economics, labour supply Tags: code of the street, human capital, labour economics, sociology
Dionissi Aliprantis wrote a superb paper on how the social skills developed to survive in the inner cities of America are not the skills that help you graduate from high school and get a job.
In the NLSY97, 26% of black inner-city youth report seeing someone shot by age 12, and 43% of black inner-city youth report the same by age 18.
The code of the street, the street smarted skills that inner-city black youth learn as teenagers to stay alive, do not pay off in regular society:
growing up in the ’hood means learning to some degree the code of the streets, the prescriptions and proscriptions of public behaviour. He must be able to handle himself in public, and his parents, no matter how decent they are, may strongly encourage him to learn the rules
The behaviours that do not help you survive in the street of the poor inner cities of America include include doing well in school, being civil to others, and speaking Standard English.
These skills that are the antithesis of the code of the street are exactly the skills valued by employers, especially employers of low paid workers. Employers of the low paid essentially want to recruit people who are friendly and reliable.
Dionissi Aliprantis found that exposure to street violence during childhood explains 20-35% of the high school dropout rate of inner-city youth.
The personnel economics of putting up election billboards
04 Sep 2014 Leave a comment
in applied price theory, labour economics, managerial economics, organisational economics, personnel economics, politics - New Zealand, theory of the firm Tags: 2014 New Zealand election, agent principal problems, labour economics, moral hazard, New Zealand politics, paid versus unpaid labour, personnel economics
I’ve been out of late, helping put up election billboards. Maybe I should get a life, but I noticed that the quality of effort by volunteers was much better than that by the contractors hired by the Internet – Mana party. Everybody in that party appears to be paid including the leader for $140K year. She is not yet in Parliament.
The Internet-Mana party election billboards are very heavy, solid wooden signs and obviously pre-manufactured and must be driven around in a truck. They are certainly too heavy to be put on the back of a trailer behind a private car.
Our signs are constructed on site from a dozen pieces of wood of various sizes. The only pre-prepared part is the billboard itself with fits on the back of a trailer.
What first took my interest is the contractors hired by the Internet – Mana party signs seem to pay not all that much regard to the traffic flow. Some of their signs are parallel with the traffic so hardly anybody can see them. They are all one sided signs.
When we are putting up a election billboard, we squabble like a bunch of old women over the exact angle each sign should face the traffic to capture the most number of passing cars and buses. Everybody has an opinion including those doing it for the first time.
We then squabble about whether the sign should be one-sided or two sided depending upon how well it can be viewed from the other side by traffic coming the other way.
We also squabble about its positioning and height to maximise the number of views by the passing traffic relative to the positioning all the other signs.
There is also a lot of vandalism of these signs by rather naive people who don’t understand that the passing motorist looks at the vandalised signs first.
It takes a whole lot of hatred to vandalised a sign in this way. Photos of the above sign immediately went viral. For some reason, the National party has repaired that sign. I don’t know why.
Utopia, you are standing in it! 
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