econ 133 { global inequality and growth gender inequality in the labor...
TRANSCRIPT
-
Econ 133 – Global Inequality and Growth
Gender inequality in the labor market
Gabriel Zucman
1
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
What we’ve learned so far:
• Supply / demand determinants of wage inequality
• Institutional determinants: Changes in minimum wage, unions,market power
• All of this was silent on key dimensions of labor income inequality:between genders & ethnicities
- 2 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
Roadmap
• The gender gap: definition and evolution
• Decomposing and explaining the gender gap
– Labor market participation
– Hourly wage
– Hours of work
- 3 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
1 The gender gap
•Most extensive definition of the gender gap = difference btw laborincome of men & women
• Today, men earn on average about 1.75 times more than women inthe US
• Gender gap has declined since 1960s but still high and persisting
- 4 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
100%
150%
200%
250%
300%
350%
400% 19
62
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
Average pre-tax labor income of men aged 20-64 / women aged 20-64
Source: Appendix Table II-F1. - 5 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
100%
150%
200%
250%
300%
350% 19
79
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Average labor income of all men aged 20-64 / all women aged 20-64, by age group
Source: Piketty, Saez and Zucman (2016)
45 to 64
20 to 44
All
- 6 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
Rea
l med
ian
pre-
tax
inco
me
($20
14)
Median pre-tax labor income: working-age men vs. working-age women
Source: Appendix Table II-B13.
Working-age men
Working-age women
Working age adults
- 7 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
2 Labor market participation
Big increase in women’s labor force participation rates since WWII
• Doubling of rates of labor force participation for women from1950s to today
• Rise in participation stronger for more educated women
- 8 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
68
Notes: Updated version of Figure from Blau, Ferber and Winkler (2014) based on data from the Current Population Survey available at www.bls.gov and Employment & Earnings, various issues.
30
40
50
60
70
80
90
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012
Part
icipa
tion
Rate
(%)
Year
Figure 3: Trends in Female and Male Labor Force Participation Rates, 1947-2014(age 16 and over)
Males
Females
- 9 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
Why did women labor force participation rise from 1950s to 1990s?
• ↗ real wages & educational attainment for women: substitutioneffect dominating income effect (↗ men’s wage)
• Greater availability of market substitutes for home work;development and dissemination of the birth control pill
• Demand shifts that favored occupations like clerical work
• But purely economic factors explain relatively little- 10 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
3 Differences in hourly wage
• Declining but still high hourly wage differentials between men andwomen, especially at the top
• Traditional explanation: human capital factors (= education andexperience).
• Important post-WW2, but don’t explain much today, because of
• 1. reduction in experience gap- 11 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
• 2. reversal of the education gap between men and women
•Women have now become more highly educated than men in theoverall population. In 2011, they earned
– 57 percent of bachelor’s degrees
– 61 percent of master’s degrees
– 51 percent of Ph.D’s
- 12 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
• So what explains the hourly wage gap today?
• Role of unions has disappeared: same unionization rates today formen and women
• Difference in occupation & industry (≈ half of hourly wage gap)
• Discrimination
- 13 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
If there was no difference in hourly wage across genders, then womenwould earn as much labor income as men
A — Yes
B — No
- 14 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
4 Differences in hours of work
Subsistence of traditional division of labor by gender in the family →women bear greatest share of family responsibilities
• Direct effect: fewer hours worked (work force interruption;part-time work) → less labor income
• Particularly large effect of parenthood (Kleven et al., 2019) [alsoaffects hourly wage and labor force participation]
- 15 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
- 16 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
- 17 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
- 18 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
Indirect negative effects of gender norms:
• Lower incentives to invest in human capital (esp. firm-specificskills) & reduced experience → lower hourly wage
• Knowing this, employers discriminate against women
• Sorting into high-flexibility-low-paying jobs (Goldin 2014)
- 19 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
5 The glass ceiling
• Glass ceiling: women face barriers in entering the top levels of thelabor market
• Still very strong today in the US, despite fact that women aremore likely to have advanced degrees
• Potential explanations: high penalties for flexibility (shorter hoursand work force interruptions); discrimination
- 20 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50% 19
62
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
Share of women in the employed population, by fractile of labor income
Source: Appendix Table II-F1.
Top 10%
Top 0.1%
Top 1%
All
- 21 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
Ex.: Bertrand, Goldin, and Katz (2010) examine earnings of MBAswho graduated between 1990 and 2006 U. of Chicago business school
• Small gender differential at the outset of the career
• But by 10-16 years post-degree, men earn 82% more
• Two potential effects: lower labor supply of women over thecareer, in turn related to career-family tradeoffs
• Additional hourly wage gap (discrimt. + penalty for shorter hours)- 22 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
6 Summary
• Despite a convergence in rates of labor force participation, womenstill earn significantly less labor income than men
• Part of this gap owes to fewer hours worked, in turn reflectingprevalence of gender norms regarding division of labor within family
• Part of it owes to lower hourly wages, in turn reflecting penaltiesfor flexibility and discrimination
- 23 -
-
Econ 133 - Global Inequality and Growth Gabriel Zucman
References
Bertrand, Marianne, Claudia Goldin, and Lawrence F. Katz, “Dynamics of the Gender Gap for Young
Professionals in the Financial and Corporate Sectors.”, American Economic Journal: Applied
Economics 2014, 2 (3): 228–55. (web)
Blau, Francine D. and Lawrence M. Kahn, “The Gender Wage Gap: Extent, Trends, and
Explanations”, NBER working paper, 2016 (web)
Goldin, Claudia, “A Grand Convergence: Its Last Chapter”, American Economic Review 2014, 104
(4): 1091-1119. (web)
Kleven, Henrik, Camille Landais, Johanna Posch, Andreas Steinhauer, Josef Zweimuller, “Child
Penalties Across Countries: Evidence and Explanations”, American Economic Association P&P,
2019 (web)
Piketty, Thomas, Emmanuel Saez, and Gabriel Zucman, “Distributional National Accounts: Methods
and Estimates for the United States”, working paper, 2016 (web)
- 24 -
http://gabriel-zucman.eu/teaching/BertrandEtal14.pdfhttp://gabriel-zucman.eu/teaching/BlauKahn16.pdfhttp://gabriel-zucman.eu/teaching/Goldin14.pdfhttps://www.henrikkleven.com/uploads/3/7/3/1/37310663/klevenetal_aea-pp_2019.pdfhttp://gabriel-zucman.eu/files/PSZ2016.pdf
The gender gapLabor market participationDifferences in hourly wageDifferences in hours of workThe glass ceilingSummary