nep-dem New Economics Papers
on Demographic Economics
Issue of 2017‒11‒19
five papers chosen by
Héctor Pifarré i Arolas
Max-Planck-Institut für demografische Forschung

  1. The Lifecycle Wage Growth of Men and Women: Explaining Gender Differences in Wage Trajectories By Mary Ann Bronson; Peter Skogman Thoursie
  2. Less alimony after divorce: Spouses' behavioral response to the 2008 alimony reform in Germany By Bredtmann, Julia; Vonnahme, Christina
  3. Economic Retirement Age and Lifelong Learning - a theoretical model with heterogeneous labor, biased technical change and international sourcing By Thomas Gries; Stefan Jungblut; Tim Krieger; Henning Meyer
  4. Wealth creation, wealth dilution and population dynamics By Christa N. Brunnschweiler; Pietro F. Peretto; Simone Valente
  5. The Legacy of the Missing Men: The Long-Run Impact of World War I on Female Labor Force Participation By Victor Gay

  1. By: Mary Ann Bronson (Department of Economics, Georgetown University); Peter Skogman Thoursie (Department of Economics, Stockholm University)
    Abstract: Why do women's wages grow more slowly than men's? Theory indicates that wages grow over the lifecycle as workers progress up an internal "career ladder," and as they switch firms and move up the "job ladder" to higher-paying firms. In this paper, we use employer-employee linked data from Sweden to decompose cumulative wage growth of men and women at each age into wage gains associated with (1) firm changes, (2) large discrete wage gains relative to one's co-workers -- which we call promotions -- and (3) interim (non-promotion) growth. While women switch firms at almost identical rates as men over the lifecycle, they have substantially lower promotion rates at all ages. Though relatively rare, promotions are the largest driver of wage growth by 45 for both men and women. Gender differences in promotion-related growth account for around 73 to 83% of the differences in lifecycle wage growth of college-educated men and women from ages 25 to 45. Differences in wage growth associated with firm changes account for 28%, while interim, non-promotion growth is slightly higher for women. Gender differences in sorting across firms with steeper vs. flatter wage structures explain only about 10% of differences in promotion probability. Lastly, we study hours worked and the evolution of the promotion gap with time to first birth. We use our findings to explain why childbirth penalties for women are so large, immediate and persistent; why gender wage differentials vary across professions; and what contributes to gender differences in estimated firm wage premiums.
    Keywords: Gender Wage Differentials, Job Ladders, Career Ladders, Promotions.
    JEL: J16 J31
    Date: 2017–10–06
  2. By: Bredtmann, Julia; Vonnahme, Christina
    Abstract: The 2008 alimony reform in Germany considerably reduced post-marital and caregiver alimony. We analyze how individuals adapted to these changed rulings in terms of labor supply, the intra-household allocation of leisure, and marital stability. We use the German Socio-Economic Panel (SOEP) and conduct a difference-in-difference analysis to investigate couples' behavioral responses to the reform. The results do not confirm theoretical expectations from labor supply and household bargaining models. In particular, we do not find evidence that women increase their labor supply as a result of the negative expected income effect. Neither do our results reveal that leisure is shifted from women to men as a response to the changed bargaining positions. In contrast, we find evidence that the reform has led to an increase in the probability to separate for married as opposed to non-married cohabiting couples.
    Keywords: alimony,marital instability,female labor supply,intra-household bargaining
    JEL: J12 J13 J22
    Date: 2017
  3. By: Thomas Gries; Stefan Jungblut; Tim Krieger; Henning Meyer
    Abstract: The employability of an aging population in a world of continuous and biased technical change is top of the political agenda. Due to endogenous human capital depreciation the effective retirement age is often below statutory retirement age resulting in permanent non-employability of older workers. We analyze this phenomenon in a putty-putty human capital vintage model and focus on education and the speed of human capital depreciation. Introducing a two-stage education system with initial schooling and lifelong learning, not even lifelong learning turns out to be capable of aligning economic and statutory retirement. However, well designed education programs will keep more workers in highly productive activities at the end of their working life, and hence will substitute for simple social transfers, or for an early switch towards very low paid jobs.
    Keywords: lifelong learning, retirement, employability, education system, heterogeneous labor, biased technical change
    JEL: J26 O33 J64
    Date: 2016
  4. By: Christa N. Brunnschweiler (University of East Anglia); Pietro F. Peretto (Duke University); Simone Valente (University of East Anglia)
    Abstract: Wealth creation driven by R&D investment and wealth dilution caused by disconnected generations interact with households' fertility decisions, delivering a theory of sustained endogenous output growth with a constant endogenous population level in the long run. Unlike traditional theories, our model fully abstracts from Malthusian mechanisms and provides a demography-based view of the long run where the ratios of key macroeconomic variables - consumption, labor incomes and financial assets - are determined by demography and preferences, not by technology. Calibrating the model parameters on OECD data, we show that negative demographic shocks induced by barriers to immigration or increased reproduction costs may raise growth in the very long run, but reduce the welfare of a long sequence of generations by causing permanent reductions in the mass of firms and in labor income shares, as well as prolonged stagnation during the transition.
    Keywords: R&D-based growth, overlapping generations, endogenous fertility, population level, wealth dilution
    JEL: O41 J11 E25
    Date: 2017–10–18
  5. By: Victor Gay
    Abstract: I explore the pathways underlying the diffusion of women's participation in the labor force across generations at the individual level. I rely on a severe exogenous shock to the adult sex ratio, World War I military fatalities in France, which generated a short-run upward shift in female labor force participation. I find that this shock to female labor transmitted across generations: women residing under the same institutional conditions but born in locations exposed to higher military death rates were more likely to be in the labor force from 1962 to 2012. Three primary mechanisms account for the long-run impact of World War I military fatalities on women's working behavior: vertical intergenerational transmission (from mothers and fathers to daughters), transmission through marriage (from husbands to wives, and from mothers in-law to daughters in-law), and oblique intergenerational transmission (from migrants to non-migrants). Consistent with theories of intergenerational diffusion of female labor force participation, I provide supporting evidence that WWI military fatalities altered preferences and beliefs about female labor in the long run.
    JEL: J16 J22 N34 Z13
    Date: 2017–11–11

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