Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg
AbstractSex-related wage differentials are almost universal. Economists traditionally tend to attribute a major fraction of the differential to the difference in on-the-job training. This difference is in turn often explained by the lower profitability of this investment for women who plan to interrupt their careers for family reasons. An alternative explanation that women do not invest because of lack of investment opportunities owing to employers'expectation that they will drop out of the market has been given little attention in the literature. The present paper tries to ascertain, theoretically and empirically, the validity of this argument. Employers have little stake in their employees' investment in general human capital. Thus, if employers' decisions affect investment, this has to be investment in firm-specific human capital. The paper explores the way employers and employees share in such an investment and the way employers' conceptions about women's labor force attachment can affect the size of the investment, women's wages, and their labor-force separation rate. To test the hypothesis that employers' expectations affect women's wages,I examine the effect of plans for labor-force separation on wages. It is assumed that employers are not aware of individual plans, so that absence of a plan's effect on wages can serve as prima facie evidence for the hypothesis. In a simultaneous-equation system it is observed that wages affect plans but plans do not affect wages. Further investigation indicates that the skill intensity of jobs which men and women occupy is a major determinant of the wage gap. This variable is very sensitive to past performance (as measured by labor-force experience and tenure) and future plans in the case of men, but is hardly affected at all by these variables in the case of women.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1002.
Date of creation: Oct 1982
Date of revision:
Publication status: published as Journal of Labor Economics, vol. 6, no. 3, pp. 277-301, July 1988.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Gronau, Reuben, 1988. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 277-301, July.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joanne Salop & Steve Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
- Duncan, Greg J & Hoffman, Saul, 1979. "On-the-Job Training and Earnings Differences by Race and Sex," The Review of Economics and Statistics, MIT Press, vol. 61(4), pages 594-603, November.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
- F. Thomas Juster, 1977. "Distribution of Economic Well-Being," NBER Books, National Bureau of Economic Research, Inc, number just77-1, October.
- Steven H. Sandell & David Shapiro, 1980. "Work Expectations, Human Capital Accumulation, and the Wages of Young Women," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 335-353.
- Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-60, December.
- Salop, Joanne & Salop, Steven, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 619-27, November.
- Dale T. Mortensen, 1978. "Specific Capital and Labor Turnover," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 572-586, Autumn.
- Fuchs, Victor R, 1974. "Recent Trends and Long-Run Prospects for Female Earnings," American Economic Review, American Economic Association, vol. 64(2), pages 236-42, May.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.