Revise and Resubmit, Journal of Labor Economics
In the media: Time Magazine, Business Insider, Quartz, The New York Times
Previously circulated as: "The Impact of Mandated Maternity Benefits on the Gender Differential in Promotions: Examining the Role of Adverse Selection"
ILR Working Paper, Institute for Compensation Studies, Cornell University, Link.
Abstract: This paper examines how mandated maternity leave policies impact the gender gap in promotions. I present a model of the gender gap in promotions where firms must choose whether to invest in the training of their employees, but they are uncertain about their employees' future choice of hours of work. If women are more likely than men to reduce their hours of work during child-rearing years, firms will invest less in women early in their careers, leading to a gender gap in promotions. In the presence of asymmetric information about workers' future preferences, mandated maternity leave policies can exacerbate this gap. Using the Multi-City Study of Urban Inequality and the Panel Study of Income Dynamics, I test the predictions of the model in the context of the Family and Medical Leave Act of 1993 (FMLA). Women hired after the enactment of the FMLA are five percent more likely to remain employed but eight percent less likely to be promoted than those who were hired before the FMLA. Furthermore, I find evidence suggesting that information asymmetry, in addition to selection, is driving the increase in the gender gap in promotions.
Revise and Resubmit, American Economic Journal: Economic Policy
Winner of the W.E. Upjohn Institute for Employment Research Early Career Research Award [Upjohn Institute Working paper]
Abstract: I study the effect of the gender composition of a student's peers on the gender earnings gap at graduation and on long-term labor market outcomes exploiting quasi-random assignment of MBA students to peer groups at a top business school in the United States. I find that a 10 percentage-point increase in the share of male peers leads to a 2.1 percent increase in the relative earnings of female students at graduation, closing the gender gap in earnings at graduation by two-thirds. The effects on women's long-term earnings grow even larger with time. Using novel data on job offers, I find that two different mechanisms drive short- and long-term earnings effects. Women with a greater share of male peers take more quantitative coursework in business school and receive job offers at graduation in higher-paying occupations, industries, and firms, jobs associated with higher wages, longer hours, and greater earnings growth. However, the effect on women's earnings at graduation is primarily explained by female students' increased willingness-to-accept the maximum salary offered in their offer set. In contrast, peer-induced effects on human capital alone place female students on dramatically different long-term expected earnings paths due to changes in the initial occupation, industry, and firm offer accepted at graduation. This change in the characteristics of the first job at graduation largely explains the effect of peer gender composition on long-term outcomes.
“Explaining Earnings Inequality: Estimating the Value of Non-Wage Amenities” joint with Alexandre Mas [Slides - new draft coming soon!]
Abstract: This paper studies whether inequality in earnings across firms can be explained, in part, by differences in the non-wage amenities of a job. We develop and implement an empirical framework to measure the value to workers of the non-wage amenity component of firm pay – in dollar terms. We find that the variance of total compensation at the firm level is twenty times that of firm pay. At the individual level, we find that the variance in total job value is six times larger than the variance of wages alone. Using a simple model where wage and non-wage amenity components of firm pay are determined endogenously by cost-minimizing firms, we construct a counterfactual exercise to measure the role of compensating differentials in inequality in firm pay. We find that while there is evidence for compensating differentials, shutting down the compensating differentials motive increases the variance in firm pay for reasonable parameter values, rather than decreases it. Compensating differentials therefore work to compress the wage distribution. Examining implications for the gender gap, we find that the gender gap in total utility compensation is augmented four-fold by taking into account the role of compensating differentials and the value of non-wage amenities.
“Inefficiency Revealed: Group-Specific Mandates and the Impact of Mandated Maternity Benefits on the Employment, Wages and Labor Supply of Women”
“Explaining the Child Earnings Penalty: Who Times Fertility and Why?” joint with Jorgen Harris
“Understanding the Child Earnings Penalty: New Evidence from Job Offer Data and Earnings Profiles”
“Explaining the College Gender Gap: Early Versus Late-Life Investments and the Career Choices of Women”
“The Effect of Grade Non-Disclosure on the Allocation of Workers to Jobs” joint with Michael Waldman
“The Gender Pay Gap and the Responsiveness of Women's Early Career Choices to Information About Ability”
“Banning the Grade: Effects of Grade Non-Disclosure Policies on Racial Minorities”