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Gender wage gaps and risky vs. secure employment: An experimental analysis

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  • Jung, SeEun
  • Choe, Chung
  • Oaxaca, Ronald L.

Abstract

In addition to discrimination, market power, and human capital, gender differences in risk preferences might also contribute to observed gender wage gaps. We conduct laboratory experiments in which subjects choose between a risky (in terms of exposure to unemployment) and a secure job after being assigned in early rounds to both types of jobs. Both jobs involve the same typing task. The risky job adds the element of a known probability that the typing opportunity will not be available in any given period. Subjects were informed of the exogenous risk premium being offered for the risky job. Women were more likely than men to select the secure job, and these job choices accounted for between 40% and 77% of the gender wage gap in the experiments. A method for classifying subjects according to risk preferences is derived from the theoretical framework and further demonstrates the higher incidence of risk aversion among women.

Suggested Citation

  • Jung, SeEun & Choe, Chung & Oaxaca, Ronald L., 2018. "Gender wage gaps and risky vs. secure employment: An experimental analysis," Labour Economics, Elsevier, vol. 52(C), pages 112-121.
  • Handle: RePEc:eee:labeco:v:52:y:2018:i:c:p:112-121
    DOI: 10.1016/j.labeco.2018.04.006
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    Cited by:

    1. Choe, Chung & Jung, Seeun & Oaxaca, Ronald L., 2017. "Identification and Decompositions in Probit and Logit Models," IZA Discussion Papers 10530, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Occupational choice; Gender wage differentials; Risk aversion; Lab experiment;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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