|
on Labor Markets - Supply, Demand, and Wages |
| By: | Jing Cai; Sai Luo; Shing-Yi Wang |
| Abstract: | Higher compensation and increased monitoring are two common strategies for addressing the moral hazard problem between firms and workers. In a field experiment with new hires at an automobile manufacturing firm in China, we randomly varied both signing bonuses and monitoring intensity. Both interventions increased worker output but through different channels: signing bonuses led to longer working hours without significant gains in performance, while enhanced monitoring improved performance as evaluated by managers. Additionally, bonuses reduced quit rates, whereas monitoring raised them. These results suggest that firms should carefully consider their primary objectives and weigh these trade-offs when designing optimal labor contracts. |
| JEL: | C93 J24 J30 M52 O15 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33977 |
| By: | David Autor; Neil Thompson |
| Abstract: | When job tasks are automated, does this augment or diminish the value of labor in the tasks that remain? We argue the answer depends on whether removing tasks raises or reduces the expertise required for remaining non-automated tasks. Since the same task may be relatively expert in one occupation and inexpert in another, automation can simultaneously replace experts in some occupations while augmenting expertise in others. We propose a conceptual model of occupational task bundling that predicts that changing occupational expertise requirements have countervailing wage and employment effects: automation that decreases expertise requirements reduces wages but permits the entry of less expert workers; automation that raises requirements raises wages but reduces the set of qualified workers. We develop a novel, content-agnostic method for measuring job task expertise, and we use it to quantify changes in occupational expertise demands over four decades attributable to job task removal and addition. We document that automation has raised wages and reduced employment in occupations where it eliminated inexpert tasks, but lowered wages and increased employment in occupations where it eliminated expert tasks. These effects are distinct from—and in the case of employment, opposite to—the effects of changing task quantities. The expertise framework resolves the puzzle of why routine task automation has lowered employment but often raised wages in routine task-intensive occupations. It provides a general tool for analyzing how task automation and new task creation reshape the scarcity value of human expertise within and across occupations. |
| JEL: | E24 J11 J23 J24 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33941 |
| By: | Liu, Kai (Faculty of Economics, University of Cambridge); Mogstad, Magne (Dept. of Economics, University of Chicago); Salvanes, Kjell Gunnar (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | We measure the returns to education in the presence of earnings uncertainty and employment risk over the life cycle. The context of our study is Norway, offering a credible instrument for schooling and population panel data with nearly career long earnings histories. We first characterize the causal relationship between schooling, earnings, and employment over the life cycle. This relationship allows us draw conclusions about how additional schooling affects the probability of having a job as well as the level and dispersion of earnings over the life cycle. To disentangle uncertainty from heterogeneity, we next model the underlying earnings process, targeting the estimated causal relationship between schooling, earnings, and employment over the life cycle. We then fit a life-cycle model with precautionary saving motive to the estimated earnings process and observed consumption profiles. The estimated model allows us to quantify how earnings uncertainty and employment risk affect the incentives to invest in education, and to examine the extent to which the progressive tax-transfer system distorts these incentives. |
| Keywords: | Returns to education; life-cycle earnings; income uncertainty; employment risk; precautionary savings |
| JEL: | D91 I26 J24 J31 |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_014 |
| By: | Niklas Garnadt; Lena Füner; Konrad Stahl; Joacim Tag; Konrad O. Stahl |
| Abstract: | Identifying high growth startups ex-ante and fostering their success is an important policy challenge. Using Swedish registry data, we show that previous labor market earnings of entrepreneurs is a simple observable that is strongly correlated with entrepreneurship success. Entrepreneurs from the top decile of income from dependent employment are four times more likely to succeed than those from the lowest decile. Their firms are larger and more productive from the outset, and this effect intensifies over time. This correlation is virtually unaffected by variations in the entrepreneurs' personal traits. It does also not vary across the business cycle. |
| Keywords: | entrepreneurship, high-growth startups, labor income, unemployment |
| JEL: | L26 J24 M13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11978 |
| By: | Kyle F. Herkenhoff; Josh Lerner; Gordon M. Phillips; Francisca Rebelo; Benjamin Sampson |
| Abstract: | We measure the real effects of private equity buyouts on worker outcomes by building a new database that links transactions to matched employer-employee data in the United States. To guide our empirical analysis, we derive testable implications from three theories in which private equity managers alter worker outcomes: (1) exertion of monopsony power in concentrated markets, (2) breach of implicit contracts with targeted groups of workers, including managers and top earners, and (3) efficient reallocation of workers across plants. We do not find any evidence that private equity-backed firms vary wages and employment based on local labor market power proxies. Wage losses are also very similar for managers and top earners. Instead, we find strong evidence that private equity managers downsize less productive plants relative to productive plants while simultaneously reallocating high-wage workers to more productive plants. We conclude that post-buyout employment and wage dynamics are consistent with professional investors providing incentives to increase productivity and monitor the companies in which they invest. |
| JEL: | G20 G34 L1 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33942 |
| By: | Julien Senn; Jan Schmitz; Christian Zehnder |
| Abstract: | Using a large-scale real effort experiment, we explore whether and how different peer assignment mechanisms affect worker performance and stress. Letting individuals choose whom to compare to increases productivity to the same extent as a targeted exogenous matching policy designed to maximize motivational spillovers. These effects are significantly larger than those obtained through random assignment and their magnitude is comparable to the impact of an increase in pay of about 10 percent. A downside of targeted peer assignment is that, unlike endogenous peer selection, it leads to a large increase in stress. The key advantage of letting workers choose whom to compare to is that it allows those workers who want to be motivated to compare to a motivating peer while also permitting those for whom social comparisons have little benefits or are too stressful to avoid them. Finally, we show that social comparisons yield stronger motivational effects than comparable non-social goals. |
| Keywords: | social comparisons, productivity, stress, incentives, real effort |
| JEL: | C93 J24 M54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11972 |
| By: | Erik Katovich (University of Connecticut); Dominic Parker (University of Wisconsin-Madison); Steven Poelhekke (Vrije Universiteit Amsterdam and Tinbergen Institute) |
| Abstract: | Sectoral expansions and contractions cause labor reallocation out of declining industries and into booming industries. Which types of workers gain and lose from these transitions? Using linked employer-employee panel data from Brazil spanning boom-bust cycles in its oil sector, we compare oil entrants with closely-matched workers hired into other sectors in the same year. We find that entry timing interacts with worker skill in ways that have lasting effects. Only highly educated workers hired into oil at the onset of a boom reap persistent earnings premiums across the boom-bust cycle. For most later entrants, especially low-education workers, the decision to enter the oil industry results in persistent unemployment and earnings penalties. We document mechanisms underlying this first-in, last-out pattern. Accumulated experience in professional occupations insulates high-education early entrants from downturns, while a boom in sector-specific training programs intensifies competition among later entrants. We discuss implications for energy transitions. |
| JEL: | J24 J31 Q33 |
| Date: | 2025–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20250033 |
| By: | Nicolas Acevedo Rebolledo; Kathryn J. Blanchard; Stephanie Riegg Cellini |
| Abstract: | In the United States, licenses are required for entry into many different occupations. Requirements vary by state and occupation, but many licenses require a minimum number of training or instructional hours. We consider the impact of these hours requirements on students and postsecondary institutions, with a particular focus on cosmetology (also known as hairstyling or beauty). Cosmetology licensing requires extensive training hours (between 500 and 2, 100 hours) in every state and typically exceeds the time required for similar licenses. We implement a difference-in-difference design based on state-level changes in required licensing hours for cosmetologists between 2011 and 2019. We ask how and whether changes to hours requirements influence student outcomes and institutional behavior. We find that lowering required hours is likely beneficial for students, as it raises completion, lowers tuition, and expands enrollment among some groups of students. Larger institutions appear to reduce their tuition by less than smaller institutions. We find no detectable effects on the earnings of cosmetologists. |
| JEL: | I21 I23 I28 J44 J48 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33936 |
| By: | Belghith, Nadia Belhaj Hassine; Fernandez, Francine Claire Chang; Lavin, Benjamin Aaron |
| Abstract: | Despite significant progress in reducing poverty, the Philippines continues to face high inequality, which stayed elevated in the early 2000s as the economy grew. Although inequality has gradually declined since 2012, it remains among the highest in Southeast Asia. This paper examines how changes in education levels and occupational structure have shaped the wage distribution over the past two decades, particularly how changes in the relative supply of skills and the structure of employment have influenced wage gaps in recent years.Using two decades of labor force survey data, the paper examines the wage premium and the supply of skilled workers in the Philippines, finding that the slow growth in college-educated workers has sustained high wage premium for skilled workers. Unconditional quantile regressions reveal that returns to both college education and high-skill occupations increase monotonically over the wage distribution, contributing to the persistence of inequality. Changes in occupational structure have also influenced income distribution. Low- and middle-skilled jobs saw relative wage gains from 2002 to 2012, but middle-skilled occupations experienced the highest growth from 2012 to 2016—a key driver behind falling wage inequality. Employment trends followed a similar pattern, with middle-skilled job growth peaking in 2012-2016. Recent trends suggest a shift away from middle-skilled jobs, though it remains uncertain whether this reflects structural changes in the labor market or temporary disruptions. |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11163 |
| By: | Lin, Yuheng (University of Dundee); Rambaccussing, Dooruj (University of Dundee); Zhu, Yu (University of Dundee) |
| Abstract: | Using the China Employer-Employee Survey (CEES) data, this study examines the returns to college education for employees across China’s manufacturing industry, most of them work in small and medium-sized enterprises (SME). Our baseline model finds that while the 1999 higher education (HE) expansion has no significant impact on college enrollment for male employees, it significantly increases college enrollment for female employees by 23.7% in the manufacturing sector. College education significantly increases the returns by 45.20% for males and 88.33% for females. Moreover, there is heterogeneity in the effects by potential gains: individuals who failed to attend college would have had a higher return compared to college graduates, indicating reverse selection into HE. Further analysis reveals that the effects are more pronounced among female managers, middle birth cohorts (born between 1984 and 1987), female vocation-track degree holders, and STEM graduates. Additionally, college education facilitates employment in roles requiring cognitive skills and reduces the likelihood of female employees performing physically demanding tasks. |
| Keywords: | marginal treat- ment effect, manufacturing industry, China employer-employee survey, returns to college education |
| JEL: | I23 I26 J31 L60 O14 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17980 |
| By: | Bunting, Jackson (University of Washington); Diegert, Paul (Toulouse School of Economics); Maurel, Arnaud (Duke University) |
| Abstract: | We provide identification results for a broad class of learning models in which continuous outcomes depend on three types of unobservables: known heterogeneity, initially unknown heterogeneity that may be revealed over time, and transitory uncertainty. We consider a common environment where the researcher only has access to a short panel on choices and realized outcomes. We establish identification of the outcome equation parameters and the distribution of the unobservables, under the standard assumption that unknown heterogeneity and uncertainty are normally distributed. We also show that, absent known heterogeneity, the model is identified without making any distributional assumption. We then derive the asymptotic properties of a sieve MLE estimator for the model parameters, and devise a tractable profile likelihood based estimation procedure. Our estimator exhibits good finite-sample properties. Finally, we illustrate our approach with an application to ability learning in the context of occupational choice. Our results point to substantial ability learning based on realized wages. |
| Keywords: | occupational choice, identification, heterogeneity, learning |
| JEL: | C14 C23 D83 J24 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17977 |
| By: | Winter, Richard (University of Mannheim); Doerrenberg, Philipp (University of Mannheim); Eble, Fabian (University of Mannheim); Rostam-Afschar, Davud (University of Mannheim); Voget, Johannes (University of Mannheim) |
| Abstract: | We provide novel evidence on the incidence of business taxes using comprehensive survey and experimental data from German firms. Leveraging randomized variation in hypothetical tax changes, we find that the incidence of profit taxes is highly asymmetric. Tax decreases are more likely to benefit workers and stimulate investment, whereas tax increases tend to be passed on to consumers through higher prices and absorbed by firm owners through reduced profit distributions. Moreover, by varying the magnitude of the tax changes, we demonstrate that worker incidence increases with the absolute size of the tax change, partially offsetting the burden on firm owners. |
| Keywords: | investment, firm behavior, tax incidence, corporate tax, payout, wages |
| JEL: | D22 H00 H22 H25 J23 J30 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17983 |
| By: | Barbara Biasi; Zoë B. Cullen; Julia H. Gilman; Nina Roussille |
| Abstract: | This paper provides the first causal evidence on how occupational wage inequality affects the labor movement, using three complementary research designs: a vignette experiment with union organizers, an information intervention during the 2023 Writers Guild of America strike, and a natural experiment following a Wisconsin reform that increased wage inequality among public school teachers. Across all studies, we find that occupational inequality undermines union strength, through multiple channels. First, workers with high individual bargaining power are more likely to withdraw support in unequal environments, preferring individual over collective bargaining. Second, union organizers strategically respond to inequality in ways that may preserve membership but limit redistribution. For instance, they shift away from campaigning on wages and choose smaller, more homogeneous bargaining units. Taken together, our findings highlight the potential for “inequality traps”, where rising inequality erodes the very institutions designed to counteract it. |
| JEL: | C93 D83 D84 J31 J5 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33978 |
| By: | Davide Malacrino; Samuel Nocito; Raffaele Saggio |
| Abstract: | This paper examines the impact of a reform aimed at expediting graduation times in Italian universities by reducing the number of exams students must pass to obtain the fixed number of credits required to graduate. Using event-study estimates that leverage the reform's staggered implementation, we find that this policy change led to an increase in on-time graduation rates but also resulted in a decreased probability of employment one-year post-graduation. However, this negative effect reverses into a positive one in the medium run. We show that these patterns are explained by students using the time gained from earlier graduation to pursue additional educational qualifications in the year following graduation. |
| Keywords: | higher education, policy evaluation, time to graduation, labor outcomes |
| JEL: | I23 I26 I28 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11979 |
| By: | Listo, Ariel (University of Maryland); Muñoz, Ercio A. (Inter-American Development Bank); Sansone, Dario (University of Exeter) |
| Abstract: | This paper examines how attitudes among supervisors, co-workers, and customers are related to discrimination against sexual minority individuals in the workplace. Participants from a large, nationally representative online sample in Chile took part in double list experiments – which reduce social desirability bias when eliciting views on sensitive topics – followed by direct questions on attitudes toward sexual minority individuals. The findings reveal a discrepancy between reported and actual levels of comfort with gay individuals in the labor market. The respondents underreported their discomfort by 15-23 percentage points, with the largest bias and lowest comfort levels observed when they were asked about supervising gay employees. These attitudinal patterns were mirrored in incentivized donation behavior: individuals who chose not to donate any amount from a lottery to a local LGBTQ-related nonprofit reported lower comfort levels and exhibited greater misreporting. Finally, the respondents consistently underestimated the broader societal support for gay employees and co-workers. |
| Keywords: | discrimination, Chile, LGBTQ+ |
| JEL: | C93 D91 J15 J71 Z13 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17976 |
| By: | Elias Carroni; Marina Della Giusta; Davide Dragone |
| Abstract: | We propose a unified economic model of sexual exchanges that treats both unpaid and paid sex as outcomes of individual time allocation decisions. Departing from existing literature that separates sex into marital relations or specialized markets, the model incorporates relational skills, gender norms, and labor market opportunities. It explains gender patterns in the supply and demand of paid sex and offers a rationale for declining sexual activity despite liberal norms. The framework accounts for behavioral responses to shocks, prices, and wage differentials, and can inform policy debates on gender inequality, fertility, and regulation of sex markets. |
| JEL: | I10 J10 J12 J16 J22 J24 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1207 |
| By: | Belot, Michèle (Cornell University); Hakimov, Rustamdjan (University of Lausanne) |
| Abstract: | This study examines the effects of structured social activities on workplace collegiality and performance in a large white-collar firm with 100 geographically dispersed offices. In a randomized controlled trial, half of the offices received subsidies to organize biweekly social events over a three-month period—including picnics, movie nights, and team games. We find that the intervention strengthens collegiality, enhances workplace friendships, and improves office-level performance. We do not detect an impact on individual productivity, but turnover appears to have fallen in the short-run, meaning that employees stayed longer in the job. We explore possible mechanisms and identify a sense of gratitude and reciprocity toward the company as the most likely mechanism driving the effects. |
| Keywords: | bonding, climate, workplace collegiality, field experiment |
| JEL: | M54 J32 C93 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17987 |
| By: | Francesco Principe (University of Bergamo); Jan van Ours (Erasmus University Rotterdam and Tinbergen Institute) |
| Abstract: | We study labor market dynamics of workers in a highly competitive industry, focusing on the relationship between workers' age, wages, and productivity. Our analysis uncovers an inverse U-shaped relationship. While some wage adjustments occur within the current firm, job mobility plays a crucial role in shaping wage trajectories. There is assortative matching with highly productive workers moving to highly productive firms, while less productive workers gravitate towards less productive firms. Our findings suggest that both in-firm wage progression and wage growth via job mobility contribute to a close alignment between wages and productivity throughout workers' careers. |
| Keywords: | Age-wage profile, productivity, job mobility |
| JEL: | J31 J62 Z22 |
| Date: | 2025–03–21 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20250020 |
| By: | Stanton, Christopher; Thomas, Catherine |
| Abstract: | Online labor platforms for short-term remote work have many more job seekers than available jobs. Despite their relative abundance, workers capture a substantial share of the surplus from transactions. We draw this conclusion from demand estimates that imply workers’ wages include significant markups over costs and a survey that validates our surplus estimates. Workers retain a significant share of the surplus because demand-side search frictions and worker differentiation reduce direct competition. Finally, we show that applying traditional employment regulations to online gig economy platforms would lower job posting and hiring rates, reducing aggregate surplus for all market participants, including workers. |
| Keywords: | online labor markets; gig economy; employment regulation |
| JEL: | F31 J22 J23 J31 J64 M51 |
| Date: | 2025–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127806 |
| By: | Pierre Boutros (Université Côte d'Azur, CNRS, GREDEG, France); Eliana Diodati (University of Torino, Italy); Michele Pezzoni (Université Côte d'Azur, CNRS, GREDEG, France; Observatoire des Sciences et Techniques, HCERES, Paris, France); Fabiana Visentin (UNU-MERIT, Maastricht University, the Netherlands) |
| Abstract: | The rise of Artificial Intelligence (AI) urges us to better understand its impact on the labor market. This paper is the first to analyze the supply of individuals with AI training facing the labor market. We estimate the relationship between AI training and individuals' careers for 35, 492 French PhD students in STEM who graduated between 2010 and 2018. To assess the unbiased effect of AI training, we compare the careers of PhD students trained in AI with those of a control sample of similar students with no AI training. We find that AI training is not associated with a higher probability of pursuing a research career after graduation. However, among students who have AI training during the PhD and pursue a research career after graduation, we observe a path dependence in continuing to publish on AI topics and a higher impact of their research. We also observe disciplinary heterogeneity. In Computer Science, AI-trained students are less likely to end up in private research organizations after graduation compared to their non-AI counterparts, while in disciplines other than Computer Science, AI training stimulates patenting activity and mobility abroad after graduation. |
| Keywords: | Artificial Intelligence, Training, PhD students'careers |
| JEL: | J24 O30 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-29 |
| By: | Kevin J. Mumford; Richard W. Patterson; Anthony Yim |
| Abstract: | What happens when college students cannot enroll in the courses they want? Using conditional random assignment to oversubscribed courses at a large public university, we find that a course shutout reduces the probability that a student ever takes any course in the corresponding subject by 30%. Course shutouts are particularly disruptive for female students, reducing women's cumulative GPAs, probability of majoring in STEM, on-time graduation, and early-career earnings. In contrast, shutouts do not appear to be disruptive to male students' long-run outcomes, with one exception—shutouts significantly increase the probability that men choose a major from the business school. |
| JEL: | I23 J16 J24 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33800 |
| By: | Magnus Neubert (Leibniz Institute of Agricultural Development in Transition Economies and Martin-Luther-Universität Halle-Wittenberg); Stefan Nikolić (Loughborough University) |
| Abstract: | Are railways always a harbinger of prosperity? We examine the economic effects of railways in Bosnia-Herzegovina under Habsburg colonial rule. Our novel dataset consistently tracks the non-agrarian population share of over 4, 500 settlements in Habsburg Bosnia in 1885, 1895, and 1910, based on census records. Applying the inconsequential units approach, with least cost paths as our instrumental variable, we estimate the effect of railway access on structural transformation. Normal-gauge railways deindustrialized Bosnian settlements by exposing local crafts to imperial competition. Narrow-gauge railways accelerated structural transformation temporarily, primarily by attracting foreigners. Narrow-gauge railways had a more sustained impact on structural transformation in settlements endowed with human capital and secured by law enforcement. Our findings suggest colonial railways are no silver bullet for economic development; transport infrastructure requires development prerequisites to have a lasting positive effect. |
| Keywords: | railways, occupational structure, Bosnia-Herzegovina, Habsburg Empire |
| JEL: | I25 J21 N94 O18 R11 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0280 |
| By: | Eric A. Hanushek; Simon Janssen; Jacob D. Light; Lisa K. Simon |
| Abstract: | We analyze the full distribution of displaced workers’ earnings losses using a new method that combines matching and synthetic control group approaches at the individual level. We find that the distribution of earnings losses is highly skewed. Average losses, as estimated by conventional event studies, are driven by a small number of workers who suffer catastrophic losses, while most recover quickly. Observable worker characteristics explain only a small fraction of the variance in earnings losses. Instead, we find substantial heterogeneity in earnings losses even among workers displaced by the same firm who have identical observed characteristics such as education, age, and gender. Workers with minimal earnings losses adjust quickly by switching industries, occupations, and especially regions, while comparable workers with catastrophic losses adjust slowly, even though they are forced to make comparable numbers of switches in the long run. |
| JEL: | J2 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33667 |
| By: | Bhalotra, Sonia (University of Warwick, IFS, CAGE, CEPR, IEA, IZA, CESifo); Clarke, Damian (University of Exeter, Universidad de Chile, IZA & MIPP.); Nazarova, Angelina (Institute for Social and Economic Research, University of Essex, MiSoC, EEA) |
| Abstract: | Looking at the earnings profiles of men and women after their first child is born, a number of studies establish that women suffer a larger penalty in earnings than men—a child penalty. Leveraging randomness in the sex of the first birth, we show that the child penalty in the UK is larger when the first born child is a girl. We label this the daughter penalty. Exploiting rich longitudinal survey data, we examine behavioural responses to the birth of a daughter vs. a son to illuminate the underpinnings of the daughter penalty. We find that the birth of a daughter triggers more household specialisation than the birth of a son, with mothers taking on a larger share of household chores and childcare. Mothers suffer a daughter penalty in mental health, while fathers report more satisfaction with their relationship. Our findings imply that girls and boys in the UK are, on average, growing up in different home environments, with girls growing up in households that, by multiple markers, are more gender-regressive. This is potentially a mechanism for the inter-generational transmission of gendered norms. JEL Codes: J2 ; J7 ; I3 |
| Keywords: | gender ; child penalty ; gender wage gap ; mental health ; parental involvement |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1564 |