Differences in earnings between men and women differ across time and countries. Yet, explanations for these changes, after taking into account worker characteristics, are lacking. In this research we study the relation between differences in earnings and movements in the labor market in transition countries. We find that periods of high churning are related to larger gender wage gaps.
When opportunity knocks: Gender wage gaps and labor market churning
1. When the opportunity knocks
When the opportunity knocks
Large structural shocks and the gender wage gap
Joanna Tyrowicz Lucas van der Velde
Warsaw School of Economics
FAME|GRAPE
European Association of Comparative Economics Studies,
September 2018
2. When the opportunity knocks
Introduction
Motivation
Gender wage gaps vary greatly across countries and over time
(Stanley and Jarrell 1998, Weichselbaumer and Winter-Ebmer 2007, ˜Nopo et al. 2012)
But why does it vary...?
Family-friendly policies and institutions
(Blau and Kahn 2003, Weichselbaumer and Winter-Ebmer 2007)
Work-time flexibility
(Mandel and Semyonov 2005, Cha and Weeden 2014, Goldin 2014)
Skill-biased technological change
(Juhn et al. 1993, Card and DiNardo 2002, Lemieux 2006, Black and Spitz-Oener 2010)
Labor market churning → Our curent paper
3. When the opportunity knocks
Introduction
This study
→ We analyze relation between GWG and large structural shocks
Our contribution
Obtain comparable GWG estimates from transition countries
Unique measure of flows
We find a relation between churning and GWG
→ heterogeneity analysis
4. When the opportunity knocks
Introduction
On the effects of structural shocks
Reallocation → Skill biased technical changes
WW II evidence → lack of men = ↑ fem participation
(Acemoglu et al. 2004, Fern´andez et al. 2004, Goldin and Olivetti 2013)
The effect of transition → ↑ Gender Gaps
(Brainerd 2000, Blau and Kahn 2003, Munich et al. 2005, Tyrowicz et al. 2018)
Differences in risk aversion
→ Stablity-wage trade off
5. When the opportunity knocks
Introduction
Motivation
Source Female SE R2
Easy to find job
Germany_(E)
Russia
Japan
Bangladesh
Slovenia
Hungary
Italy
France
Bulgaria
Portugal
Germany_(W)
Switzerland
Spain
Cyprus
Czech_Republic
Israel
Poland
Great_Britain
Canada
philippines
Netherlands
Denmark
New_Zealand
Norway
United_States
0 .2 .4 .6
Easy to find new job
Germany_(E)
Bulgaria
France
Hungary
Russia
Great_Britain
Job is secure
6. When the opportunity knocks
Data and Methods
Data
Gender wage gaps
Collection of individual level databases
Several sources: ISSP, EU-SES, LFS, LMS, LSMS
Detailed list
Labor market flows
Life in Transition Survey (LiTS) - 2006
Retrospective data on 1000 ind in all transition countries
Quality checks
7. When the opportunity knocks
Data and Methods
Gender wage gap – Measurement
We apply ˜Nopo (2008) non-parametric decomposition to hourly wages.
Raw gap = ∆X + ∆A + ∆M + ∆W
where
∆X : explained component
∆A: unexplained / adjusted component
∆M : component due to Men different than Women in the sample
∆W : component due to Women different than Men in the sample
Control variables: age group, education (3 levels), marital status and
urban/rural Why?
Distinguish between chorts born before and after 1965 How does it look like?
8. When the opportunity knocks
Data and Methods
Labour market flows
General flows
Hirings =
FlowN→E + FlowEi →Ej
Et−1
and Separations =
FlowE→N + FlowEi →Ej
Et−1
,
We also compute gross (sum), net (difference) and excess (gross-net)
Sectoral flows
Inflowi =
Hiringst,i
n
i Hiringst,i
and Outflowsj =
FlowEj →N + FlowEj →E
Et−1,j
,
Where i refers to private sector or service private and j to public SOE
9. When the opportunity knocks
Data and Methods
Labour market shocks – Measurement
Follow Hausmann et al. (2005) and focus on episodes of rapid change
Episode =
1 if vart > 80th
percentile and vart > 1.5 ∗ vart−1
0 otherwise,
How do episodes they look like?
1 Between 4 and 25 episodes (∼ 600 year×country) Examples
2 Weak correlation in hirings/separations episodes
10. When the opportunity knocks
Data and Methods
Our model
Specification
∆Ai, j, t = β0 + β1episodei,t,n + θt + θi,j + εi,j,t
Where
i, j, t index coutry, source and times
∆A is the adjusted GWG
episodei,t,n dummy for an episode in the last n years
θt year FE
θi,j country×source FE
11. When the opportunity knocks
Results
General flows
Hiring Separation Gross Net Excess
Cohorts born before 1965
Episode1 -0.01 0.04*** -0.04* 0.04* -0.01
(0.02) (0.01) (0.02) (0.02) (0.02)
Episode2 0.01 0.02** -0.03 0.06*** -0.00
(0.02) (0.01) (0.02) (0.01) (0.02)
Episode3 0.01 0.02 -0.00 0.06*** -0.01
(0.02) (0.01) (0.02) (0.01) (0.02)
Cohorts born after 1965
Episode1 0.01 0.00 0.08*** 0.14*** 0.00
(0.02) (0.02) (0.02) (0.04) (0.05)
Episode2 0.01 -0.00 0.02 0.01 0.00
(0.02) (0.02) (0.02) (0.04) (0.03)
Episode3 0.00 0.01 0.03* 0.02 0.00
(0.02) (0.02) (0.02) (0.03) (0.03)
Notes: Ln indicates that a country experienced an episode in the last n years. Regressions also
include year and country×source FE. SD clustered at country-year level. Observations weighted by
SD adjusted gap.
12. When the opportunity knocks
Results
Reallocation flows
Separations Hirings
SOE Manuf. Private Services
Cohorts born before 1965
Episode1 0.05*** 0.03*** 0.03 0.01
(0.02) (0.01) (0.03) (0.02)
Episode2 0.04*** 0.04*** -0.03 -0.00
(0.02) (0.01) (0.03) (0.01)
Episode3 0.04*** 0.04*** -0.05*** -0.02
(0.02) (0.01) (0.02) (0.02)
Cohorts born after 1965
Episode1 -0.02 -0.00 -0.03 -0.06
(0.02) (0.02) (0.03) (0.05)
Episode2 -0.01 -0.01 -0.00 -0.03
(0.02) (0.02) (0.02) (0.02)
Episode3 -0.02 -0.01 -0.01 -0.00
(0.01) (0.02) (0.01) (0.03)
Notes: Ln indicates that a country experienced an episode in the last n years. Regressions also
include year and country×source FE. SD clustered at country-year level. Observations weighted by
SD adjusted gap.
13. When the opportunity knocks
The end
Concluding remarks
Asymmetric effect of crisis based on gender and cohort
Differences across cohorts:
1 Bargaining position?
2 Primary vs secondary earners?
3 Skill-mismatch?
Policy implications
→ ALMP consider specific groups , e.g. gender/minority quotas
14. When the opportunity knocks
The end
Last frame
Questions
Thank you for your attention
Lucas van der Velde
Contact: lvandervelde@grape.org.pl
More about our research on
http://grape.org.pl
Twitter: @GRAPE ORG
15. When the opportunity knocks
References
Acemoglu, D., Autor, D. H. and Lyle, D.: 2004, Women, war, and wages: The effect
of female labor supply on the wage structure at midcentury, Journal of Political
Economy 112(3), 497–551.
Black, S. E. and Spitz-Oener, A.: 2010, Explaining women’s success: Technological
change and the skill content of women’s work, Review of Economics and Statistics
92(1), 187–194.
Blau, F. D. and Kahn, L. M.: 2003, Understanding international differences in the
gender pay gap, Journal of Labor Economics 21(1).
Brainerd, E.: 2000, Women in transition: Changes in gender wage differentials in
Eastern Europe and the former Soviet Union, Industrial and labor relations review
pp. 138–162.
Card, D. and DiNardo, J. E.: 2002, Skill-biased technological change and rising wage
inequality: Some problems and puzzles, Journal of Labor Economics
20(4), 733–783.
Cha, Y. and Weeden, K. A.: 2014, Overwork and the slow convergence in the gender
gap in wages, American Sociological Review 79(3), 457–484.
Fern´andez, R., Fogli, A. and Olivetti, C.: 2004, Mothers and sons: Preference
formation and female labor force dynamics, The Quarterly Journal of Economics
119(4), 1249–1299.
Goldin, C.: 2014, A grand gender convergence: Its last chapter, American Economic
Review 104(4), 1091–1119.
Goldin, C. and Olivetti, C.: 2013, Shocking labor supply: A reassessment of the role of
world war ii on women’s labor supply, The American Economic Review
103(3), 257–262.
16. When the opportunity knocks
The end
Hausmann, R., Pritchett, L. and Rodrik, D.: 2005, Growth accelerations, Journal of
Economic Growth 10(4), 303–329.
Juhn, C., Murphy, K. M. and Pierce, B.: 1993, Wage inequality and the rise in returns
to skill, Journal of Political Economy 101(3), 410.
Lemieux, T.: 2006, Increasing residual wage inequality: Composition effects, noisy
data, or rising demand for skill?, American Economic Review 96(3), 461–498.
Mandel, H. and Semyonov, M.: 2005, Family policies, wage structures, and gender
gaps: Sources of earnings inequality in 20 countries, American Sociological Review
70(6), 949–967.
Munich, D., Svejnar, J. and Terrell, K.: 2005, Is women’s human capital valued more
by markets than by planners?, Journal of Comparative Economics 33(2), 278–299.
˜Nopo, H.: 2008, Matching as a tool to decompose wage gaps, The Review of
Economics and Statistics 90(2), 290–299.
˜Nopo, H., Daza, N. and Ramos, J.: 2012, Gender earning gaps around the world: a
study of 64 countries, International Journal of Manpower 33(5), 464–513.
Stanley, T. D. and Jarrell, S. B.: 1998, Gender wage discrimination bias? A
meta-regression analysis, Journal of Human Resources pp. 947–973.
Tyrowicz, J., van der Velde, L. and Goraus, K.: 2018, How (not) to make women
work?, Social Science Research 75, 154–167.
Weichselbaumer, D. and Winter-Ebmer, R.: 2007, The effects of competition and
equal treatment laws on gender wage differentials, Economic Policy
22(50), 235–287.
17. When the opportunity knocks
The end
LiTS
JC p-val JD p-val
Pairwise correlation 0.449 0.001 0.328 0.018
OLS - no controls 0.524 0.001 0.641 0.018
OLS - country dummies 0.345 0.003 0.580 0.074
OLS - year dummies 0.443 0.025 0.765 0.012
OLS - country and year dummies 0.226 0.153 1.057 0.005
Notes: Reproduced from Tyrowicz and van der Velde (2018). Table adapted from Table D.1 in ?.
The dependent variable is the median of job creation (destruction) in the literature for each
country year and the independent variable hirings (separations) from LiTS data.
Back
18. When the opportunity knocks
The end
Detailed list of sources
Country ISSP LFS LMS LSMS SES
BGR 1992/1993,
1997/2000,
2002/2005
1995, 1997, 2001 2002, 2006
CZE 1992, 1995/1999 2002, 2006
EST 2002, 2006
HRV 2006
HUN 1990, 1992/1999,
2002/2006
2002, 2006
LTU 2002, 2006
LVA 1995/1996,
1998/2006
2002, 2006
POL 1991/1999,
2001/2004, 2006
1995/2006 2002, 2006
ROM 2002, 2006
RUS 1991/1997, 1999,
2001, 2003,
2005/2006
1994/1996, 1998,
2000/2006
SRB 1995/2002 2002/2003
SVK 1999, 2002/2004 2002, 2006
SVN 1993/2006
UKR 2003/2004
Notes: ISSP: International Social Survey Program; LFS: Labour Force Survey; LMS: Longitudinal
Monitoing Survey; LSMS: Living Standards Measurement Survey, SES: Structure of Earnings
Survey. Back
19. When the opportunity knocks
The end
GWG in Poland: adding controls
.75.8.85.9.951
Average%matched
1996 1998 2000 2002 2004 2006
Year
.05.1.15.2.25
Adjustedwagegap
1996 1998 2000 2002 2004 2006
Year
Basic control + Firm characteristics + Industry + Occupation
Notes: Figure shows the percentage matched with additional controls (top) and the resulting
adjusted GWG (bottom) Source Polish LFS. Back
20. When the opportunity knocks
The end
GWG in two cohorts
Notes: Figure shows GWG in transition economies.Left provides Raw GWG and right the Adjusted
GWG. Back
21. When the opportunity knocks
The end
Episodes of fast reallocation: cohort <1965
0
1
BGR
1990 1995 2000 2005
0
1
CZE
1990 1995 2000 2005
0
1
HUN
1990 1995 2000 2005
0
1
LVA
1990 1995 2000 2005
0
1
POL
1990 1995 2000 2005
0
1
RUS
1990 1995 2000 2005
0
1
SRB
1990 1995 2000 2005
0
1
SVN
1990 1995 2000 2005
Episode type: Hirings Separations Both
Back
22. When the opportunity knocks
The end
Synchronicity of flows
Overall flows Transition flows Globalization flows
Episodes Correlation -0.05 -0.06 -0.09*
Episodes Partial correlation -0.04 -0.14*** -0.07
Levels Correlation -0.32*** 0.03 -0.12***
Levels Partial correlation 0.11** -0.03 -0.13***
Notes: Table displays correlation and partial correlation coefficients of measures of hirings and
separations. Overall refers to correlation between hirings and separations; transition, to the
correlation between private sector in hirings and separations from public sector; and globalization,
to the correlation between services in hirings and separations from manufacturing sector. The
number of observations is 308. Back