Firm-level Drivers of Gender Earnings Inequality
Paper Session
Saturday, Jan. 4, 2025 10:15 AM - 12:15 PM (PST)
- Chair: Daniel Tannenbaum, University of Nebraska-Lincoln
What’s Your Worth? A Field Experiment in Negotiations
Abstract
What role does negotiation play in the job market? In a study with over 3,000 mid-career professionals actively seeking job offers, we find the following. Among mid-career college educated professionals on the job market, compensation rises on average by 4% through negotiation; 47% negotiate at least one offer, 27% successfully improve the terms of their preferred offer. In a randomized controlled trial we show that participants under-negotiate: when prompted to negotiate, the rate of negotiation rises 7.4% and average compensation gains from negotiation rise 35%. We discuss implications for search, matching, and bargaining theory.The Entrepreneurial Gender Gap: The Role of Motherhood and Maternity Leave
Abstract
Women continue to be underrepresented in entrepreneurship and female-owned businesses tend to be smaller, less profitable, and less likely to receive external financing than male-owned ones. We leverage the richness of Dutch administrative data combined with a maternity leave reform to shed light on the gender gap in entrepreneurship and its determinants. First, we document new facts on the gender gap in entrepreneurship, revealing a large motherhood penalty: following childbirth, women experience a 22% decline in the likelihood of self-employment and a 32% reduction in business profits compared to fathers. Second, we explore the implications of childbirth for the direction of innovation by investigating whether motherhood leads to a shift in entrepreneurial activities towards or away from sectors that predominantly cater to female consumers. Finally, we provide causal evidence on how maternity leave policies can affect the gender gap in entrepreneurship by exploiting a maternity leave reforms in 2008 that introduced public maternity leave insurance for self-employed mothers. Preliminary results show that the availability of maternity leave benefits increases mothers' likelihood of remaining in self-employment, with limited effects on profits. In particular, the positive impact is concentrated among mothers whose partners do not hold a higher education degree, suggesting that maternity leave benefits may serve a critical role in alleviating financial constraints of these mothers.Workplace Flexibility and the Gender Earnings Gap
Abstract
We examine the role of workplace flexibility in explaining gender earnings inequality. While women prefer flexibility in workplace location, they also prefer flexibility in the number of hours worked. In a model of compensating differentials, we estimate that the two types of flexibility present a trade-off: flexible total number of work hours is more concentrated in lower skill jobs and its price is exceedingly high in jobs with location flexibility. The trade-off between the two types of flexibility leads to women choosing jobs with fewer but more flexible total number of hours, contributing to a widening of the gender earnings gap. We also examine the hypothesis that women choose jobs below their productivity level to obtain flexibility in the number of hours worked.Discussant(s)
Na'ama Shenhav
,
University of California-Berkeley
Rebecca Jack
,
University of Nebraska-Lincoln
Raffaele Saggio
,
University of British Columbia
Melanie Wasserman
,
University of California-Los Angeles
JEL Classifications
- J2 - Demand and Supply of Labor
- J3 - Wages, Compensation, and Labor Costs