nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒10‒31
23 papers chosen by
Joseph Marchand
University of Alberta

  1. Brain over Brawn: Job Polarization, Structural Change, and Skill Prices By Sasiwimon Warunsiri Paweenawat; Lusi Liao
  2. Automation and Polarization By Daron Acemoglu; Jonas Loebbing
  3. Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories By Parag Mahajan; Dhiren Patki; Heiko Stüber
  4. Global Trends in Income Inequality and Income Dynamics: New Insights from GRID By Fatih Guvenen; Luigi Pistaferri; Giovanni L. Violante
  5. Opening the Black Box: Task and Skill Mix and Productivity Dispersion By Blackwood, G.Jacob; Cunningham, Cindy; Dey, Matt; Foster, Lucia; Grim, Cheryl; Haltiwanger, John C.; Nesbit, Rachel; Pabilonia, Sabrina Wulff; Stewart, Jay; Tuttle, Cody; Wolf, Zoltan
  6. Technology and the Task Content of Jobs across the Development Spectrum By Julieta Caunedo; Elisa Keller; Yongseok Shin
  7. The Impact of Racial Segregation on College Attainment in Spatial Equilibrium By Victoria Gregory; Julian Kozlowski; Hannah Rubinton
  8. The Big Expansion of Rural Secondary Schooling during the Cultural Revolution and The Returns to Education in Rural China By Terry Sicular; Mengbing Zhu
  9. Heterogeneous Effects of Monetary and Non-Monetary Job Characteristics on Job Attractiveness in Nursing By Martin Kroczek; Philipp Kugler
  10. Urban-Biased Growth: A Macroeconomic Analysis By Fabian Eckert; Sharat Ganapati; Conor Walsh
  11. Organisational Leadership: How Much Does It Matter? By Haile, Getinet Astatike
  12. The Welfare Economics of Reference Dependence By Daniel Reck; Arthur Seibold
  13. Aversion to hiring algorithms: Transparency, gender profiling, and self-confidence By Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
  14. Structural break in the Norwegian LFS due to the 2021 redesign By Håvard Hungnes; Terje Skjerpen; Jørn Ivar Hamre; Xiaoming Chen Jansen; Dinh Quang Pham; Ole Sandvik
  15. Nonlinear Budget Set Regressions for the Random Utility Model By Soren Blomquist; Anil Kumar; Che-Yuan Liang; Whitney K. Newey
  16. Tradable Jobs and Local Labour Market in sub-Saharan Africa By Charpe, Matthieu
  17. Early retirement provision for elderly displaced workers By Herman Kruse; Andreas Myhre
  18. Rank vs Money: Evidence from Managers By Raymond, C.; Shvets, J.
  19. Labor Informality and Market Segmentation in Senegal By Rodriguez Castelan, Carlos; Vazquez, Emmanuel
  20. Inside the NBA Bubble: How Black Players Performed Better without Fans By Caselli, Mauro; Falco, Paolo; Somekh, Babak
  21. What wages do people expect for vocational and academic education backgrounds in Switzerland? By Maria A. Cattaneo
  22. The "coy seller" problem: A market design to reveal willingness to trade By Apostolos Filippas; John Horton; Sehar Noor; Dmitry Sorokin
  23. Parental Risk Preferences, Maternal Bargaining Power, and the Educational Progressions of Children: Lab-in-the-Field Evidence from Rural Côte D'Ivoire By Basu, Arnab K.; Dimova, Ralitza; Gbakou, Monnet Benoit Patrick; Viennet, Romane

  1. By: Sasiwimon Warunsiri Paweenawat; Lusi Liao
    Abstract: This study investigates the effects of brain and brawn skills on wages and the changes in wage distribution in Thailand using the Labor Force Survey (LFS) from 1985 to 2020. We quantify the contribution of changes in the skill requirement and highlight the increase in the return on brain and the decrease in the penalty on brawn, which helps explain the wage distribution changes across periods. We further explore the polarization in the labor market and analyze the changes in the wage distribution by applying the decomposition method proposed by Firpo et al. (2009). Our results suggest that wage dispersion increases in the top end over the first two time periods but decreases in the third time period, while it continues to decrease in the lower end of the distribution.
    Keywords: Polarization; Structural change; RIF-regressions; Decomposition; Wage inequality; Job tasks
    JEL: J20 J23 J24 J31
    Date: 2022–10
  2. By: Daron Acemoglu; Jonas Loebbing
    Abstract: We develop an assignment model of automation. Each of a continuum of tasks of variable complexity is assigned to either capital or one of a continuum of labor skills. We characterize conditions for interior automation, whereby tasks of intermediate complexity are assigned to capital. Interior automation arises when the most skilled workers have a comparative advantage in the most complex tasks relative to capital, and because the wages of the least skilled workers are sufficiently low relative to their productivity and the effective cost of capital in low-complexity tasks. Minimum wages and other sources of higher wages at the bottom make interior automation less likely. Starting with interior automation, a reduction in the cost of capital (or an increase in capital productivity) causes employment and wage polarization. Specifically, further automation pushes workers into tasks at the lower and upper ends of the task distribution. It also monotonically increases the skill premium above a skill threshold and reduces the skill premium below this threshold. Moreover, automation tends to reduce the real wage of workers with comparative advantage profiles close to that of capital. We show that large enough increases in capital productivity ultimately induce a transition to low-skill automation and qualitatively alter the effects of automation - thereafter inducing monotone increases in skill premia rather than wage polarization.
    JEL: J23 J31 O33
    Date: 2022–09
  3. By: Parag Mahajan; Dhiren Patki; Heiko Stüber
    Abstract: Workers who enter the labor market during recessions experience lasting earnings losses, but the role of non-pay amenities in either exacerbating or counteracting these losses remains unknown. Using population-scale data from Germany, we find that labor market entry during recessions generates a 6 percent reduction in earnings cumulated over the first 15 years of experience. Implementing a revealed-preference estimator of employer quality that aggregates information from the universe of worker moves across employers, we find that one-quarter of recession-induced earnings losses are compensated for by non-pay amenities. Purely pecuniary estimates can therefore overstate the welfare costs of labor market entry during recessions.
    Keywords: earnings inequality; recessions; non-pay amenities
    JEL: E32 J24 J31 J32
    Date: 2022–10–01
  4. By: Fatih Guvenen; Luigi Pistaferri; Giovanni L. Violante
    Abstract: The Global Repository of Income Dynamics (GRID) is a new open-access, cross- country database that contains a wide range of micro statistics on income inequality, dynamics, and mobility. It has four key characteristics: it is built on micro panel data drawn from administrative records; it fully exploits the longitudinal dimension of the underlying datasets; it offers granular descriptions of income inequality and income dynamics for finely defined subpopulations; and it is designed from the ground up with the goals of harmonization and cross-country comparability. This paper introduces the database and presents a set of global trends in income inequality and income dynamics across the 13 countries that are currently in GRID. Our results are based on the statistics created for GRID by the 13 country teams who also contributed to this special issue with individual articles.
    JEL: E24 J24 J31
    Date: 2022–09
  5. By: Blackwood, G.Jacob (Amherst College); Cunningham, Cindy (U.S. Bureau of Labor Statistics); Dey, Matt (US Bureau of Labor Statistics); Foster, Lucia (U.S. Census Bureau); Grim, Cheryl (U.S. Census Bureau); Haltiwanger, John C. (University of Maryland); Nesbit, Rachel (University of Maryland); Pabilonia, Sabrina Wulff (U.S. Bureau of Labor Statistics); Stewart, Jay (U.S. Bureau of Labor Statistics); Tuttle, Cody (University of Texas at Austin); Wolf, Zoltan (U.S. Census Bureau)
    Abstract: An important gap in most empirical studies of establishment-level productivity is the limited information about workers' characteristics and their tasks. Skill-adjusted labor input measures have been shown to be important for aggregate productivity measurement. Moreover, the theoretical literature on differences in production technologies across businesses increasingly emphasizes the task content of production. Our ultimate objective is to open this black box of tasks and skills at the establishment-level by combining establishment-level data on occupations from the Bureau of Labor Statistics (BLS) with a restricted-access establishment-level productivity dataset created by the BLS-Census Bureau Collaborative Micro-productivity Project. We take a first step toward this objective by exploring the conceptual, specification, and measurement issues to be confronted. We provide suggestive empirical analysis of the relationship between within-industry dispersion in productivity and tasks and skills. We find that within-industry productivity dispersion is strongly positively related to within-industry task/skill dispersion.
    Keywords: productivity, skills, tasks, manufacturing
    JEL: D24 J24 J31 L60
    Date: 2022–09
  6. By: Julieta Caunedo; Elisa Keller; Yongseok Shin
    Abstract: The tasks workers perform on the job are informative about the direction and the impact of technological change. We harmonize occupational task content measures between two worker-level surveys, which separately cover developing and developed countries. Developing countries use routine-cognitive tasks and routine-manual tasks more intensively than developed countries, but less intensively use non-routine analytical tasks and non-routine interpersonal tasks. This is partly because developing countries have more workers in occupations with high routine contents and fewer workers in occupations with high non-routine contents. More important, a given occupation has more routine contents and less non-routine contents in developing countries than in developed countries. Since 2006, occupations with high non-routine contents gained employment relative to those with high routine contents in most countries, regardless of their income level or initial task intensity, indicating the global reaches of the technological change that reduces the demand for occupations with high routine contents.
    Keywords: occupation; task; technological change; data harmonization
    JEL: O11 J24 E24
    Date: 2022–09–29
  7. By: Victoria Gregory; Julian Kozlowski; Hannah Rubinton
    Abstract: We incorporate race into an overlapping-generations spatial-equilibrium model with neighborhood spillovers. Race matters in two ways: (i) the Black-White wage gap and (ii) homophily—the preferences of individuals over the racial composition of their neighborhood. We find that these two forces generate a Black-White college gap of 22 percentage points, explaining about 80% of the college gap in the data for the St. Louis metro area. Counterfactual exercises show that the wage gap and homophily explain 7 and 18 percentage points of the college gap, respectively. A policy of equalizing school funding across neighborhoods reduces the college gap by almost 10 percentage points and generates large welfare gains.
    Keywords: racial disparities; neighborhood segregation; education; income inequality
    JEL: J15 J24 O18
    Date: 2022–10–12
  8. By: Terry Sicular (University of Western Ontario); Mengbing Zhu (Beijing Normal University, China)
    Abstract: During the Cultural Revolution China embarked on a dramatic, albeit temporary, expansion of secondary education in rural areas that affected tens of millions of children who reached secondary school age in the late 1960s and 1970s. The conventional wisdom is that this expansion was politicized and low quality. Using instrumental variables estimation, we exploit variation in the expansion across localities and birth cohorts to estimate the impact of Cultural Revolution education on individual outcomes. Creative use of historical county-level information matched with rich household survey data from the mid-1990s allows analysis of multiple outcomes. We find a significant, positive effect of Cultural Revolution years of education on off-farm employment and wage earnings. The effect on household income is mixed and likely reflects the substitution of market purchases for own production.
    Keywords: Education expansion, secondary education, returns to schooling, rural China, Cultural Revolution
    JEL: I21 I28 J24 J31 O15
    Date: 2022
  9. By: Martin Kroczek; Philipp Kugler
    Abstract: We apply a novel methodological approach described by Chernozhukov, Fern´andez-Val & Luo (2018), to analyze preference heterogeneity regarding non-monetary job characteristics and trade-offs between wage and non-monetary job characteristics. Using this approach, we can describe preference heterogeneity more concise than with subgroup analysis. Analyzing data from a selfconducted factorial survey experiment on nurses, we find significant effect heterogeneity regarding the single job characteristics and the trade-offs between wage and non-monetary job characteristics. We also find positive interaction effects between wage and other job characteristics. We further analyze which factors are associated with effect heterogeneity. Working hours and gender appear to be the main drivers of these effects. We also find differences regarding the sources of a nurse’s motivation to initially choose the nursing occupation. Differentiation of job characteristics (job offers) to fit different preferences can therefore be a more effective and efficient way to attract workers than a “one size fits all” solution. Regarding nursing jobs, there is some evidence for such differentiation.
    Keywords: labor supply; wage; non-monetary job characteristics; heterogeneity analysis; nurses
    JEL: J22 J31 J32 I11
    Date: 2022–09–26
  10. By: Fabian Eckert; Sharat Ganapati; Conor Walsh
    Abstract: Since 1980, US wage growth has been fastest in large cities. Empirically, we show that most of this urban-biased growth reflects wage growth at large Business Services firms, which are also the most intensive users of information and communications technology (ICT) capital in the US economy. We provide an explicit economic mechanism whereby ICT is more complementary with labor at larger firms. Quantitatively, we find that with such a complementarity, the observed decline in ICT prices alone can account for most of the urban-biased growth, since Business Services firms in big cities tend to be large.
    JEL: J3 O33 R11 R12
    Date: 2022–09
  11. By: Haile, Getinet Astatike (University of Nottingham)
    Abstract: We study the influence of leadership on organisational performance and worker wellbeing using data from the 2004 and 2011 Workplace Employment Relations Survey (WERS). Our most conservative estimates from fixed effects regressions on a panel of organisations reveal that virtuous leadership is significantly and positively linked to an upbeat assessment of organisational performance, and an increase in worker wellbeing. Specifically, the estimates reveal that an increase in leadership quality by one standard deviation increases organisational performance and worker job satisfaction by 0.27 and 0.73 standard deviations, respectively, while it leads to a fall in worker job anxiety by 0.13 standard deviations. The results support the hypothesis that good leadership is vital for the success of business including worker wellbeing, which organisational policy makers ought to heed. There is a dearth of evidence on organisational leadership as an institution and its influence on organisational outcomes, which this paper aims to address.
    Keywords: leadership, organisational performance, worker wellbeing, linked data, Britain
    JEL: I31 J28 J5 L2 M5
    Date: 2022–09
  12. By: Daniel Reck; Arthur Seibold
    Abstract: Empirical evidence suggests that individuals often evaluate options relative to a reference point, especially seeking to avoid losses. In this paper, we provide the first welfare analysis under reference-dependent preferences. We decompose the welfare impact of changes in reference points and prices into direct and behavioral effects, and describe how these effects depend on whether reference dependence reflects a bias or a normative preference. In a simple model of loss aversion grounded in common empirical findings, we find that lowering reference points robustly improves welfare, while the welfare effect of a price change depends critically on normative judgments. We also derive sufficient statistics characterizations of the welfare effects of changing reference points and prices. We illustrate these theoretical findings with an empirical application to reference dependence exhibited in German workers’ retirement decisions. Both simulation and sufficient statistics results suggest positive welfare effects of increasing the Normal Retirement Age, but ambiguous effects of financial incentives to postpone retirement. Finally, we study how adopting alternative models of reference dependent preferences modifies key welfare effects.
    Keywords: reference-dependent preferences, loss aversion, welfare, pension reform
    JEL: D91 D60 H55 J26
    Date: 2022
  13. By: Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
    Abstract: We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers' gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident
    Keywords: algorithm aversion,experiment,hiring discrimination,transparency
    JEL: D91 J71 C9
    Date: 2022
  14. By: Håvard Hungnes; Terje Skjerpen; Jørn Ivar Hamre; Xiaoming Chen Jansen; Dinh Quang Pham; Ole Sandvik (Statistics Norway)
    Abstract: The labour force surveys (LFSs) on all Eurostat countries underwent a substantial redesign in January 2021. To ensure coherent labour market time series for the main indicators in the Norwegian LFS, we model the impact of the redesign. We use a state-space model that takes explicit account of the rotating pattern of the LFS. We also include auxiliary variables related to employment and unemployment that are highly correlated with the LFS variables we consider. The results of a parallel run are also included in the model. This paper makes two contributions to the literature on the effects of LFS redesign. First, we suggest a symmetric specification of the process of the wave-specific effects. Second, we account for substantial fluctuations in the labour force estimates during the Covid-19 pandemic by applying time-varying hyperparameters. Likelihood-ratio tests and examination of the auxiliary residuals show the latter to be warranted.
    Keywords: State-space models; Auxiliary information; Labour market domains; Level shifts; Covid19; Norway
    JEL: C32 C51 C83 J21
    Date: 2022–08
  15. By: Soren Blomquist; Anil Kumar; Che-Yuan Liang; Whitney K. Newey
    Abstract: This paper is about the nonparametric regression of a choice variable on a nonlinear budget set when there is general heterogeneity, i.e., in the random utility model (RUM). We show that utility maximization makes this a three-dimensional regression with piecewise linear, convex budget sets with a more parsimonious specification than previously derived. We show that the regression allows for measurement and/or optimization errors in the outcome variable. We characterize all of the restrictions of utility maximization on the budget set regression and show how to check these restrictions. We formulate nonlinear budget set effects that can be identified by this regression and give automatic debiased machine learners of these effects. We find that in practice nonconvexities in the budget set have little effect on these estimates. We use control variables to allow for endogeneity of budget sets and adjust for productivity growth in taxable income. We apply the results to estimate .52 as the elasticity of an overall tax rate change in Sweden. We also find that the restrictions of utility maximization are satisfied at the choices made by nearly all individuals in the data.
    Keywords: nonlinear budget sets; nonparametric estimation; heterogeneous preferences; taxable income; revealed stochastic preference
    JEL: C14 C24 H31 J22
    Date: 2022–09–28
  16. By: Charpe, Matthieu
    Abstract: This paper measures the impact of attracting tradable jobs on nontradable jobs at the local level in sub-Saharan countries. Applying the local multiplier approach to 10 medium and low-income countries disaggregated into 1441 administrative entities, we show that the multipliers are 3 to 5 times larger than in high-income countries. The multipliers also increase with the employment status and the skills of the tradable jobs created, highlighting the importance of the consumption of locally produced goods. This points to the importance of manufacturing for economic development and structural transformation. The paper also suggests a modification of the usual shift-share instrumental variable in countries characterized by sectoral diversification/unconditional convergence. Lastly, we show that the multipliers maybe be impacted by the size of administrative entities.
    Keywords: Local multiplier, tradable, nontradable, local labour market, structural transformation
    JEL: J23 J46 O14 R11 R22
    Date: 2022–10–03
  17. By: Herman Kruse (Statistics Norway); Andreas Myhre
    Abstract: This paper studies the economic effects on re-employment and program substitution behavior among elderly displaced workers who exogenously lose eligibility for their early retirement option. We use detailed Norwegian matched employer-employee data containing information on bankruptcy dates and individual-level wealth, income, pensions and social security benefits. Our empirical strategy employs a regression discontinuity design, as job displacement before a certain age cut-off results in the loss of eligibility for early retirement benefits between ages 62–67 years in Norway. We find that re-employment rates are indistinguishable between workers who just retain eligibility for early retirement benefits and those who just do not. Meanwhile, those who lose eligibility offset 69% of their lost benefits through take-up of other social security benefits, where 51 percentage points comes from disability insurance and 13 percentage points from unemployment insurance. Our findings are particularly policy relevant as tightening of age-limits for old-age pensions is on the agenda in several OECD countries, while current economic hardship throughout the region may lead to increased job displacement for elderly workers.
    Keywords: early retirement; job displacement; labor supply; benefit substitution; social security
    JEL: H55 I38 J14 J26 J65
    Date: 2022–08
  18. By: Raymond, C.; Shvets, J.
    Abstract: We study the existence and relative importance of status concerns compared to financial incentives among managers in a large firm where the bonus is determined through a high powered tournament. Using detailed data about both performance and labour input decisions, we consider managers' response to feedback about their rank as well as monetary bonuses. We find that managers exhibit rank concerns that are distinct from, but co-exist with, financial performance incentives. These rank concerns are important: moving from the bottom to the top of the firm's ranking is worth up to $4,500 a year to the average manager, or 48% of their annual performance bonus. Moreover, managers exhibit desire to catch up (i.e., utility is concave in rank): when managers get a bad rank they respond by improving performance, rather than getting discouraged. Our data allow us to identify these effects using both outputs (performance) as well as inputs (staffing decisions) of the managers.
    Keywords: Status, Incentives, Relative performance, Intrinsic motivation
    JEL: D83 J22 J33 M12 M52
    Date: 2022–10–13
  19. By: Rodriguez Castelan, Carlos (World Bank); Vazquez, Emmanuel (Universidad Nacional de la Plata)
    Abstract: Understanding the selection of workers into informality is a policy priority to design programs to increase formalization across Sub-Saharan Africa, where nine out of ten workers are informal. This paper estimates a model of self-selection with entry barriers into the formal sector to identify the extent of involuntary informality in Senegal, a representative country in terms of levels of informality in West Africa and with one of the most rigid labor markets in the world. The results show that the desire of being formal is greater for workers with formal education, married, and a lower proportion of children younger than age five living in the household. The individual's preference for the formal sector also grows with age at a decreasing rate. The results also show that labor informality is mainly a voluntary phenomenon, with 30 percent of informal workers being involuntarily displaced into the informal sector. The results are robust to different model specifications, definitions of labor informality, and heterogeneous groups of workers.
    Keywords: labor informality, segmentation, labor markets, Senegal
    JEL: J42 J46 N37
    Date: 2022–09
  20. By: Caselli, Mauro; Falco, Paolo; Somekh, Babak
    Abstract: In the NBA, predominantly Black players play in front of predominantly non-Black fans. Using the 'NBA bubble', a natural experiment induced by COVID-19, we show that the performance of Black players improved significantly with the absence of fans vis-à-vis White players. This is consistent with Black athletes being negatively affected by racist pressure from mostly non-Black audiences. We dispel several alternative hypotheses. Beyond hurting individual players, fans' behavior causes significant economic damage to the NBA by lowering the quality of the game.
    Keywords: discrimination,harassment,racism,performance,basketball,NBA,COVID-19
    JEL: D91 J15 J71 Z22
    Date: 2022
  21. By: Maria A. Cattaneo
    Abstract: Correctly anticipating the earnings for different educational profiles is pivotal in making informed education decisions. In this paper, leveraging unique survey data, we study the wage expectations for academic and vocational education backgrounds in Switzerland. We find significant heterogeneity in the expected wage distributions for given educational profiles and strong differences in wage beliefs by gender, age, socioeconomic status, region of residence, and migration background. Personal reference points seem to matter in forming these wage expectations, and more than half of the respondents overestimate the returns to academic versus vocational education, especially the returns expected at younger ages. The latter is vital for education policy because our analyses show that the expected returns determine preferences for specific educational tracks for the own (hypothetical) child. If education decisions are illinformed, this likely leads to educational mismatches and related adverse effects later in life.
    Keywords: wage expectations, educational preferences, biased beliefs
    JEL: I20 D84 J31
    Date: 2022–10
  22. By: Apostolos Filippas (Gabelli School of Business, Fordham University, New York, New York, United States 10023); John Horton (Sloan School of Management, MIT, Cambridge, Massachusetts, United States 02142); Sehar Noor (John F. Kennedy School of Government, Harvard, Cambridge, Massachusetts, United States 02138); Dmitry Sorokin (Unafilliated)
    Abstract: Buyers pursuing de facto unavailable sellers is a common source of inefficiency in matching markets. We describe an experimental intervention in an online labor market where workers could rent the right to signal higher capacity via a badge that simply said “Available Now.” This badge was visible to treated employers looking to hire, but not to control employers. We find strong evidence of positive worker selection into badge-renting, and that employers viewed that badge as informative and sought-out workers who rented the badge. We also consider the problem of pricing such a signal in equilibrium, and present evidence from a series of quasi-experiments.
    Keywords: Market design; online marketplaces; online experiments
    JEL: D47 J32 J40
    Date: 2022–09
  23. By: Basu, Arnab K. (Cornell University); Dimova, Ralitza (University of Manchester); Gbakou, Monnet Benoit Patrick (Félix Houphouët-Boigny University); Viennet, Romane (OECD)
    Abstract: We analyse the effect of parental risk preferences and a novel measure of maternal bargaining power over educational expenses - elicited via lab-in-the-field experiments in rural Côte d'Ivoire – on the educational progression of boys and girls. Data from 135 couples and their children show that father's risk aversion is negatively associated with school attendance for boys and lowers the likelihood of transition from no-schooling to primary schooling for both boys and girls. Mother's risk aversion, on the other hand, has a positive association with the transition into primary schooling and a negative association with the transition into secondary schooling only for girls. Mother's bargaining power is also negatively associated with girls' schooling, while greater bargaining power for mothers who are relatively more risk averse than the father adversely impacts the transition into primary schooling for boys. Our findings are in line with suggestive evidence that points to a preference for current income generated by the employment of boys in high value cash crop production and the concern for girls' safety associated with traveling long distances to attend secondary schools.
    Keywords: Côte d'Ivoire, bargaining power, educational progressions, risk preferences
    JEL: C93 J43 O55
    Date: 2022–09

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