Research

Searching for Job and Marriage: Household Formation, Fertility Shock, and Gender Gaps in Employment

 (Job Market Paper)

This paper develops a random search model incorporating marriage decisions, fertility shocks, and human capital accumulation to examine the mechanisms underlying wage and employment differences between men and women over their life-cycles. The model assumes that men and women are mostly identical, with women bearing child-rearing responsibilities in a gender-heterogeneous labor market. When single, workers search for jobs and marriage partners individually; when married, they search for jobs jointly as a household. The household search and exogenous fertility shocks are the primary factors contributing to the life-cycle employment patterns observed in the NLSY97 data. Child-rearing responsibilities amount to approximately 39.83 hours per week, a significant portion of the 80 hours available to each worker, leading to a decline in women's employment rates and full-time working status. Initial gender wage gaps stem from gender-specific wage offer distributions, with human capital accumulation as the main factor widening these gaps over time. Counterfactual policy experiments indicate that a gender-neutral hiring process could eliminate wage gaps, while 10 hours of government-funded childcare services per week could eliminate employment differences. 

Taste-Based Discrimination against Sexual Orientation: An Equilibrium Search Model with Bargaining and Private Information

This paper evaluates the effect of prejudice sentiments on the wages of homosexual relative to heterosexual men. I propose a random search model with taste-based prejudice, bargaining, and migration. In particular, since sexual orientation is unobservable, the wage is determined by bargaining with one-sided private information. The estimates show that prejudice is crucial in predicting the empirical earnings and employment patterns. Although homosexual workers have higher conditional mean productivity, they earn only 80% to 90% of their productivity value due to prejudice. The monetary loss amounts to 3.99 to 12.88 dollars per hour on average under different model specifications. Finally, a tax of 0.09 to 0.3 dollars per hour of work on heterosexual men is sufficient to compensate for the loss.