The new lifecycle of women's employment is initially high and flat, there is a dip in the middle and a phasing out that is more prolonged than for previous cohorts. The hump is gone, the middle is a bit sagging and the top has greatly expanded. We explore the increase in cumulative work experience for women from the 1930s to the 1970s birth cohorts using the SIPP and the HRS. We investigate the changing labor force impact of a birth event across cohorts and by education and also the impact of taking leave or quitting. We find greatly increased labor force experience across cohorts, far less time out after a birth and greater labor force recovery for those who take paid or unpaid leave. More work experience across the lifecycle is related to the increased employment of women in their older ages.
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Understanding Earnings Instability: How Important are Employment Fluctuations and Job Changes?
August 2009
Working Paper Number:
CES-09-20
Using three panel datasets (the matched CPS, the SIPP, and the newly available Longitudinal Employment and Household Dynamics (LEHD) data), we examine trends in male earnings instability in recent decades. In contrast to several papers that find a recent upward trend in earnings instability using the PSID data, we find that earnings instability has been remarkably stable in the 1990s and the 2000s. We find that job changing rates remained relatively constant casting doubt on the importance of labor market 'churning.' We find some evidence that earnings instability increased among job stayers which lends credence to the view that greater reliance on incentive pay increased instability of worker pay. We also find an offsetting decrease in earnings instability among job changers due largely to declining unemployment associated with job changes. One caveat to our findings is that we focus on men who have positive earnings in two adjacent years and thus ignore men who exit the labor force or re-enter after an extended period. Preliminary investigation suggests that ignoring these transitions understates the rise in earnings instability over the past two decades.
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Selection and Specialization in the Evolution of Marriage Earnings Gaps
October 2015
Working Paper Number:
CES-15-36
We examine changes in marriage and earnings patterns across four cohorts born between 1936 and 1975, using data from a series of Survey of Income and Program Participation panels linked to administrative data on earnings. We find that for both men and women, marriage has become increasingly positively associated with education and earnings potential. We compare ordinary least squares (OLS) and fixed effect (FE) estimates of the earnings differential associated with marriage. We find that the marriage earnings gap fell for women in fixed-effect estimates implying that the impact of specialization has diminished over time. We also find that increasingly positive selection into marriage means that OLS estimates overstate the reduction in the marriage earnings gap. While our findings imply that marriage is no longer associated with lower earnings among women without minor children in our most recent cohort, the motherhood gap remains large. Among men, we find that the marriage premium actually increases for more recent birth cohorts in fixed-effects regressions.
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Interpreting Cohort Profiles of Lifecycle Earnings Volatility
April 2024
Working Paper Number:
CES-24-21
We present new estimates of earnings volatility over time and the lifecycle for men and women by race and human capital. Using a long panel of restricted-access administrative Social Security earnings linked to the Current Population Survey, we estimate volatility with both transparent summary measures, as well as decompositions into permanent and transitory components. From the late 1970s to the mid 1990s there is a strong negative trend in earnings volatility for both men and women. We show this is driven by a reduction in transitory variance. Starting in the mid 1990s there is relative stability in trends of male earnings volatility because of an increase in the variance of permanent shocks, especially among workers without a college education, and a more attenuated trend decline among women. Cohort analyses indicate a strong U-shape pattern of volatility over the working life, which comes from large permanent shocks early and later in the lifecycle. However, this U-shape shifted downward and leftward in more recent cohorts, the latter from the fanning out of lifecycle transitory volatility in younger cohorts. These patterns are more pronounced among White men and women compared to Black workers.
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Is the Gender Pay Gap Largest at the Top?
December 2023
Working Paper Number:
CES-23-61
No: it is at least as large at bottom percentiles of the earnings distribution. Conditional quantile regressions reveal that while the gap at top percentiles is largest among the most-educated, the gap at bottom percentiles is largest among the least-educated. Gender differences in labor supply create more pay inequality among the least-educated than they do among the most-educated. The pay gap has declined throughout the distribution since 2006, but it declined more for the most-educated women. Current economics-of-gender research focuses heavily on the top end; equal emphasis should be placed on mechanisms driving gender inequality for noncollege-educated workers.
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Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?
January 2015
Working Paper Number:
CES-15-04
We examine changes in inequality and instability of the combined earnings of married couples over the 1980-2009 period using two U.S. panel data sets: Social Security earnings data matched to Survey of Income and Program Participation panels (SIPP-SSA) and the Panel Study of Income Dynamics. Relative to male earnings inequality, the inequality of couples' earnings is both lower in levels and rises by a smaller amount. We also find that couples' earnings instability is lower in levels compared to male earnings instability and actually declines in the SIPP-SSA data. While wives' earnings played an important role in dampening the rise in inequality and year-to-year variation in resources at the family level, we find that marital sorting and coordination of labor supply decisions at the family level played a minor role. Comparing actual couples to randomly paired simulated couples, we find very similar trends in earnings inequality and instability.
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The Impact of Welfare Waivers on Female Headship Decisions
February 2003
Working Paper Number:
CES-03-03
While much of the focus of recent welfare reforms has been on moving recipients from welfare to work, many reforms were also directed at affecting decisions about living arrangements, pregnancy, marriage and cohabitation. This paper focuses on women's decisions to become or remain unmarried mothers, that is, female heads of families. We assess the impact of welfare reform waivers on those decisions while controlling for confounding local economic and social contextual conditions. We pool the 1990, 1992, and 1993 panels of the Survey of Income and Program Participation (SIPP) which span the calendar time when many states began adopting welfare waivers. For its descriptors of local labor market conditions, the project uses skill specific measures of wages and employment opportunities for counties. We estimate models for levels of female headship and proportional hazard models for entry and exit from female headship. In the hazards, we employ stratified Cox partial likelihood methods and investigate the use of state fixed effects or state stratified hazard models to control for unmeasured state influences. Based on data through 1995, we find limited evidence that workencouraging waivers had a beneficial effect by reducing female headship of families. We find little evidence that family caps, teenage coresidence requirements or termination limits will reduce the number of single-parent families.
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Preschoolers Enrolled and Mothers at Work? The Effects of Universal Pre-Kindergarten
March 2008
Working Paper Number:
CES-08-04
Three states (Georgia, Oklahoma and Florida) recently introduced Universal Pre- Kindergarten (Universal Pre-K) programs offering free preschool to all age-eligible children, and policy makers in many other states are promoting similar policies. How do such policies affect the participation of children in preschool programs (or do they merely substitute for preschool offered by the market)? Does the implicit child care subsidy afforded by Universal Pre-K change maternal labor supply? I present a model that includes preferences for child quality and shows the directions of change in preschool enrollment and maternal labor supply in response to Universal Pre-K programs are theoretically ambiguous. Using restricted-access data from the Census, together with year and birthday based eligibility cutoffs, I employ a regression discontinuity framework to estimate the effects of Universal Pre-K availability. Universal Pre-K availability increases preschool enrollment by 12 to 15 percent, with the largest effect on children of women with less than a Bachelor's Degree. Universal Pre-K availability has little effect on the labor supply of most women. However, women residing in rural areas in Georgia increase their children's preschool enrollment and their own employment by 22 and 20 percent, respectively, when Universal Pre-K is available.
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Estimating the Immediate Impact of the COVID-19 Shock on Parental Attachment to the Labor Market and the Double Bind of Mothers
July 2020
Working Paper Number:
CES-20-22R
I examine the impact of the COVID-19 shock on parents' labor supply during the initial stages of the pandemic. Using difference-in-difference approaches and monthly panel data from the Current Population Survey (CPS), I compare labor market attachment, non-work activity, hours worked, and earnings and wages of those in areas with early school closures and stay-in-place orders with those in areas with delayed or no pandemic closures. While there was no immediate impact on detachment or unemployment, mothers with jobs in early closure states were 53.2 percent more likely than mothers in late closure states to have a job but not be working as a result of early shutdowns. There was no effect on working fathers or working women without school age children. Of mothers who continued working, those in early closure states worked more weekly hours than mothers in late closure states; fathers reduced their hours. Overall, the pandemic appears to have induced a unique immediate juggling act for working mothers of school age children.
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The Mis-Measurement of Permanent Earnings: New Evidence from Social Security Earnings Data
May 2002
Working Paper Number:
CES-02-12
This study investigates the reliability of using short-term averages of earnings as a proxy for permanent earnings in empirical research. An earnings dynamics model is estimated on a large sample of men covering the period from 1983 to 1997 following the cohort-based methodology of Baker and Solon (1999). The analysis uses a unique dataset that matches men in the 1984, 1990 and 1996 Surveys of Income and Program Participation (SIPP) to the Social Security Administration's Summary Earnings Records (SER). The results confirm that using a short-term average of earnings can lead to spurious estimates of the effect of lifetime earnings on a particular outcome. In addition, the transitory variance appears to vary considerably over the lifecycle. The share of earnings variance due to transitory factors is higher among blacks and the persistence of transitory shocks appears to be greater for this group as well. Finally, the transitory variance appears to be a more important factor in explaining the overall earnings variance of college educated men than those without college.
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Same-Sex and Opposite-Sex Couples and the Child Penalty
May 2023
Working Paper Number:
CES-23-25R
Existing work has shown that the entry of a child into a household results in a large and sustained increase in the earnings gap between male and female partners in opposite-sex couples. We expand this analysis of the child penalty to examine within-couple dynamics in earnings for both opposite-sex and same-sex couples in the U.S. around the time their first child enters the household. Using linked survey and administrative data and event-study methodology, we confirm earlier work finding a child penalty for women in opposite-sex couples. We find this is true even when the female partner is the primary earner pre-parenthood, lending support to the importance of gender norms in opposite-sex couples. By contrast, in both female and male same-sex couples, earnings changes associated with child entry differ by the relative pre-parenthood earnings of the partners and tend towards equalization: secondary earners see an increase in earnings, while primary earners see a small decrease.
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