Fewer women than men become executive managers. They earn less, hold more junior positions, and a... more Fewer women than men become executive managers. They earn less, hold more junior positions, and attrite faster. We compiled a large panel data set on executives and formed a career hierarchy to analyze promotion and compensation rates. Given executive rank and background, women are paid more than men, experience less income uncertainty, and are promoted as quickly. Amongst survivors, being female increases the chance of becoming CEO. Hence the gender pay gap and job rank differences are primarily attributable to female executives attriting at higher rates than males in an occupation where survival is rewarded with promotion and higher compensation.
BY GEORGE-LEVI GAYLE, LIMOR GOLAN, AND ROBERT A. MILLER This appendix includes supplemental mater... more BY GEORGE-LEVI GAYLE, LIMOR GOLAN, AND ROBERT A. MILLER This appendix includes supplemental materials for the model, identification, estimation, data, and results discussed in Gayle, Golan, and Miller (2015). Section A contains the derivation of the formulas used in the model, identification, and estimation for Type I extreme value distributions. Section B presents details on the data constructions and summary of the main sample used in the paper. Section C presents the first-stage estimation. Section D presents additional result tables not included in the paper. A. THE EXTREME-VALUE DISTRIBUTION IN OUR STRUCTURAL ESTIMATION, we assume throughout that ε t is distributed as a Type 1 extreme value. The computational advantages of parameterizing G(ε) this way are most evident from Lemma A.1 below, where we provide formulas for A t (h) and B t (h), the value of human capital on and off the equilibrium path, and also an expression for marginal disturbances, q jk [p t (h)]. LEMMA A.1: If ε jkt is independently and identically distributed as a Type I extreme value with location and scale parameters (0 1), then q jk p t (h) = ln p 0t (h) − ln p jkt (h) (S-1) where p 0t (h) is the probability that the optimal choice is retirement, A t (h) = p 0t (h) 1/bt (b t + 1)/b t (S-2) and B t h h = p 0t h h 1/bt
This appendix includes supplemental materials for the model, identi…cation, estimation, data and ... more This appendix includes supplemental materials for the model, identi…cation, estimation, data and results discussed in Gayle, Golan and Miller (2015). Section A contains the derivation of the formulas used in the model, identi…cation and estimation for type I extreme value distributions. Section B presents details on the data constructions and summary of the main sample used in the paper. Section C presents the …rst-stage estimation. Section D presents additional result tables not included in the paper.
This paper investigates the role of labor-market attachment, on-thejob human-capital accumulation... more This paper investigates the role of labor-market attachment, on-thejob human-capital accumulation, occupational sorting, and discrimination in the narrowing gender earnings gap from 1968-93. This paper contributes in three ways: First, it formulates an estimable dynamic model of labor-supply, occupational sorting and human-capital accumulation in which gender discrimination and the earnings gap arise endogenously. Second, it demonstrates identi cation of such models and develops a three-step estimation technique. Third, it uses the framework to quantify the main driving forces behind the changes in labor-market gender patterns. Increase in overall productivity, demographic changes and statistical discrimination patterns account for a large percentage of the decline in the gender earnings gap and the increase in female labor market experience. Whereas, relative increase in productivity in professional occupations raise representation of women in professional occupations. Further analysis shows that labor-market frictions signi cantly amplify exogenous changes in our model. Without labor-market frictions, the earnings gap would have been smaller by at least 45%. Fewer women would have participated in the labor force, but those who participated would have worked more and earned incomes similar to those of men. We nd that there are signi cantly higher returns to professional occupations and that this has increased greatly over time, accounting for women's increasing representation in professional occupations.
This paper analyzes the sources of the racial difference in the intergenerational transmission of... more This paper analyzes the sources of the racial difference in the intergenerational transmission of human capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce. It finds that the racial differences in the marriage matching patterns lead to racial differences in labor supply and home hours of couples. Although both the black-white labor market earnings and marriage market gaps are important sources of the black-white achievement gap, the assortative mating and divorce probabilities racial gaps accounts for a larger fraction of it.
Fewer women than men become executive managers. They earn less over their careers, hold more juni... more Fewer women than men become executive managers. They earn less over their careers, hold more junior positions, and exit the occupation at a faster rate. We compiled a large panel data set on executives and formed a career hierarchy to analyze mobility and compensation rates. We …nd that, controlling for executive rank and background, women earn higher compensation than men, experience more income uncertainty, and are promoted more quickly. Amongst survivors, being female increases the chance of becoming CEO. Hence, the unconditional gender pay gap and job-rank di¤erences are primarily attributable to female executives exiting at higher rates than men in an occupation where survival is rewarded with promotion and higher compensation.
This paper provides evidence that managers have private information they exploit for …nancial gai... more This paper provides evidence that managers have private information they exploit for …nancial gain at the expense of shareholders. It develops a model of optimal contracting to show that moral hazard, hidden actions taken by agents, can rationalize why a principal would optimally induce agents to bene…t from their private information.
This paper addresses two questions: What accounts for the gender gap in labor-market outcomes? Wh... more This paper addresses two questions: What accounts for the gender gap in labor-market outcomes? What are the driving forces behind the changes in the gender-labor-market outcomes over the period 1968-97? It formulates a dynamic general equilibrium model of labor supply, occupational sorting and human capital accumulation in which gender discrimination and an earnings gap arise endogenously. It uses this model to quantify the driving forces behind the decline in the gender earnings gap and the increase in women's labor-force participation, professional-occupation representation and hours worked. It …nds that labor-market experience is the most important factor explaining the gender earnings gap. In addition, statistical discrimination accounts for a large fraction of the observed gender earnings gap and its decline. It also …nds that a large increase in aggregate productivity in professional occupations plays a major role in the increase in women's labor-force participation, professional-occupation representation and hours worked. Although of less importance, demographic changes account for a substantial part of the increase in female labor-force participation and hours worked, whereas home-production technology shocks do not.
This paper is an empirical study of the market for managers, more specifically the effects of age... more This paper is an empirical study of the market for managers, more specifically the effects of agency, human capital, and preferences on their promotion, tenure, turnover and compensation. From a large longitudinal data set compiled from observations on executives and their publicly listed firms, we construct a career hierarchy and report on its main features. Our summary results motivate a
This paper formulates and estimates a dynamic model of labor supply, occupational sorting, human ... more This paper formulates and estimates a dynamic model of labor supply, occupational sorting, human capital accumulation and discrimination to explain the narrowing gender earnings gap from 1968 to 1993. The paper proves the model is identified and develops a three-step estimation technique. Imperfect information significantly amplifies exogenous shocks: statistical discrimination accounts for 36 percent of the observed gender earnings gap
This paper estimates the impact of parents'time investment in young children, their socioeconomic... more This paper estimates the impact of parents'time investment in young children, their socioeconomic status and family structure on long-term outcomes of children. We developed and estimated a model of dynastic households in which altruistic individuals choose fertility, labor supply, and time investment in children sequentially, using data on two generations from the PSID. Parental behavior a¤ects the education outcomes of children, their labor market earnings, and also their marriage market outcomes. The dynastic framework provides a natural way to aggregate the outcomes of children as it is measured by their valuation function. Time allocation patterns di¤er by race, gender, education and family structure (number of children and marital status). Both the returns to parental time investment and the costs vary across these groups. On average black individuals invest less time with their children. Our estimation results show that despite the fact that the valuation function is higher for whites and the fact that conditional on education, blacks earn less than whites, on the margin, there are no signi…cant race di¤erences in the rate of returns to paternal time investment, and blacks have a higher return to maternal time investment than whites. The main reason for the lower parental time investment by blacks is the di¤erences in family structure. There is a signi…cantly higher proportion of black single mothers than white single mothers and the opportunity costs of time for single mothers are higher than the opportunity costs of married mothers due to income sharing and transfers within married households. We also …nd that the returns to maternal time investment are signi…cantly higher for boys. This implies that mothers act in a compensatory manner, favoring low ability children in the family. Since girls already have a higher likelihood of achieving a high level of education than boys, mothers seem to invest more time in boys than in girls as the number of children increases. Our …ndings suggest a signi…cant quality-quantity trade-o¤. The level of investment per child is smaller the larger the number of children, thus, this decline in the per-child investment is driven by the time constraint and the opportunity costs of time and not by the properties of the production function technology of children. We, also …nd that quality-quantity trade-o¤ for blacks is signi…cantly larger than that
Abstract In this paper we developed and estimated a model of dynastic households in which altruis... more Abstract In this paper we developed and estimated a model of dynastic households in which altruistic individuals choose fertility, labor supply, and time investment in children sequentially, using data on two generations from the PSID. We then use the estimates to quantify the quality-quantity trade-offs and the return to parental time investment in children. We find that both fathers' and mothers' time investment increases children's outcomes, however, the overall return to fathers' time investment is only 60% that of mothers' time ...
Fewer women than men become executive managers. They earn less, hold more junior positions, and a... more Fewer women than men become executive managers. They earn less, hold more junior positions, and attrit faster. We compiled a large panel data set on executives and formed a career hierarchy to analyze promotion and compensation rates. Given executive rank and background, women are paid more than men, experience less income uncertainty, and are promoted as quickly. Amongst survivors, being
Fewer women than men become executive managers. They earn less, hold more junior positions, and a... more Fewer women than men become executive managers. They earn less, hold more junior positions, and attrite faster. We compiled a large panel data set on executives and formed a career hierarchy to analyze promotion and compensation rates. Given executive rank and background, women are paid more than men, experience less income uncertainty, and are promoted as quickly. Amongst survivors, being female increases the chance of becoming CEO. Hence the gender pay gap and job rank differences are primarily attributable to female executives attriting at higher rates than males in an occupation where survival is rewarded with promotion and higher compensation.
BY GEORGE-LEVI GAYLE, LIMOR GOLAN, AND ROBERT A. MILLER This appendix includes supplemental mater... more BY GEORGE-LEVI GAYLE, LIMOR GOLAN, AND ROBERT A. MILLER This appendix includes supplemental materials for the model, identification, estimation, data, and results discussed in Gayle, Golan, and Miller (2015). Section A contains the derivation of the formulas used in the model, identification, and estimation for Type I extreme value distributions. Section B presents details on the data constructions and summary of the main sample used in the paper. Section C presents the first-stage estimation. Section D presents additional result tables not included in the paper. A. THE EXTREME-VALUE DISTRIBUTION IN OUR STRUCTURAL ESTIMATION, we assume throughout that ε t is distributed as a Type 1 extreme value. The computational advantages of parameterizing G(ε) this way are most evident from Lemma A.1 below, where we provide formulas for A t (h) and B t (h), the value of human capital on and off the equilibrium path, and also an expression for marginal disturbances, q jk [p t (h)]. LEMMA A.1: If ε jkt is independently and identically distributed as a Type I extreme value with location and scale parameters (0 1), then q jk p t (h) = ln p 0t (h) − ln p jkt (h) (S-1) where p 0t (h) is the probability that the optimal choice is retirement, A t (h) = p 0t (h) 1/bt (b t + 1)/b t (S-2) and B t h h = p 0t h h 1/bt
This appendix includes supplemental materials for the model, identi…cation, estimation, data and ... more This appendix includes supplemental materials for the model, identi…cation, estimation, data and results discussed in Gayle, Golan and Miller (2015). Section A contains the derivation of the formulas used in the model, identi…cation and estimation for type I extreme value distributions. Section B presents details on the data constructions and summary of the main sample used in the paper. Section C presents the …rst-stage estimation. Section D presents additional result tables not included in the paper.
This paper investigates the role of labor-market attachment, on-thejob human-capital accumulation... more This paper investigates the role of labor-market attachment, on-thejob human-capital accumulation, occupational sorting, and discrimination in the narrowing gender earnings gap from 1968-93. This paper contributes in three ways: First, it formulates an estimable dynamic model of labor-supply, occupational sorting and human-capital accumulation in which gender discrimination and the earnings gap arise endogenously. Second, it demonstrates identi cation of such models and develops a three-step estimation technique. Third, it uses the framework to quantify the main driving forces behind the changes in labor-market gender patterns. Increase in overall productivity, demographic changes and statistical discrimination patterns account for a large percentage of the decline in the gender earnings gap and the increase in female labor market experience. Whereas, relative increase in productivity in professional occupations raise representation of women in professional occupations. Further analysis shows that labor-market frictions signi cantly amplify exogenous changes in our model. Without labor-market frictions, the earnings gap would have been smaller by at least 45%. Fewer women would have participated in the labor force, but those who participated would have worked more and earned incomes similar to those of men. We nd that there are signi cantly higher returns to professional occupations and that this has increased greatly over time, accounting for women's increasing representation in professional occupations.
This paper analyzes the sources of the racial difference in the intergenerational transmission of... more This paper analyzes the sources of the racial difference in the intergenerational transmission of human capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce. It finds that the racial differences in the marriage matching patterns lead to racial differences in labor supply and home hours of couples. Although both the black-white labor market earnings and marriage market gaps are important sources of the black-white achievement gap, the assortative mating and divorce probabilities racial gaps accounts for a larger fraction of it.
Fewer women than men become executive managers. They earn less over their careers, hold more juni... more Fewer women than men become executive managers. They earn less over their careers, hold more junior positions, and exit the occupation at a faster rate. We compiled a large panel data set on executives and formed a career hierarchy to analyze mobility and compensation rates. We …nd that, controlling for executive rank and background, women earn higher compensation than men, experience more income uncertainty, and are promoted more quickly. Amongst survivors, being female increases the chance of becoming CEO. Hence, the unconditional gender pay gap and job-rank di¤erences are primarily attributable to female executives exiting at higher rates than men in an occupation where survival is rewarded with promotion and higher compensation.
This paper provides evidence that managers have private information they exploit for …nancial gai... more This paper provides evidence that managers have private information they exploit for …nancial gain at the expense of shareholders. It develops a model of optimal contracting to show that moral hazard, hidden actions taken by agents, can rationalize why a principal would optimally induce agents to bene…t from their private information.
This paper addresses two questions: What accounts for the gender gap in labor-market outcomes? Wh... more This paper addresses two questions: What accounts for the gender gap in labor-market outcomes? What are the driving forces behind the changes in the gender-labor-market outcomes over the period 1968-97? It formulates a dynamic general equilibrium model of labor supply, occupational sorting and human capital accumulation in which gender discrimination and an earnings gap arise endogenously. It uses this model to quantify the driving forces behind the decline in the gender earnings gap and the increase in women's labor-force participation, professional-occupation representation and hours worked. It …nds that labor-market experience is the most important factor explaining the gender earnings gap. In addition, statistical discrimination accounts for a large fraction of the observed gender earnings gap and its decline. It also …nds that a large increase in aggregate productivity in professional occupations plays a major role in the increase in women's labor-force participation, professional-occupation representation and hours worked. Although of less importance, demographic changes account for a substantial part of the increase in female labor-force participation and hours worked, whereas home-production technology shocks do not.
This paper is an empirical study of the market for managers, more specifically the effects of age... more This paper is an empirical study of the market for managers, more specifically the effects of agency, human capital, and preferences on their promotion, tenure, turnover and compensation. From a large longitudinal data set compiled from observations on executives and their publicly listed firms, we construct a career hierarchy and report on its main features. Our summary results motivate a
This paper formulates and estimates a dynamic model of labor supply, occupational sorting, human ... more This paper formulates and estimates a dynamic model of labor supply, occupational sorting, human capital accumulation and discrimination to explain the narrowing gender earnings gap from 1968 to 1993. The paper proves the model is identified and develops a three-step estimation technique. Imperfect information significantly amplifies exogenous shocks: statistical discrimination accounts for 36 percent of the observed gender earnings gap
This paper estimates the impact of parents'time investment in young children, their socioeconomic... more This paper estimates the impact of parents'time investment in young children, their socioeconomic status and family structure on long-term outcomes of children. We developed and estimated a model of dynastic households in which altruistic individuals choose fertility, labor supply, and time investment in children sequentially, using data on two generations from the PSID. Parental behavior a¤ects the education outcomes of children, their labor market earnings, and also their marriage market outcomes. The dynastic framework provides a natural way to aggregate the outcomes of children as it is measured by their valuation function. Time allocation patterns di¤er by race, gender, education and family structure (number of children and marital status). Both the returns to parental time investment and the costs vary across these groups. On average black individuals invest less time with their children. Our estimation results show that despite the fact that the valuation function is higher for whites and the fact that conditional on education, blacks earn less than whites, on the margin, there are no signi…cant race di¤erences in the rate of returns to paternal time investment, and blacks have a higher return to maternal time investment than whites. The main reason for the lower parental time investment by blacks is the di¤erences in family structure. There is a signi…cantly higher proportion of black single mothers than white single mothers and the opportunity costs of time for single mothers are higher than the opportunity costs of married mothers due to income sharing and transfers within married households. We also …nd that the returns to maternal time investment are signi…cantly higher for boys. This implies that mothers act in a compensatory manner, favoring low ability children in the family. Since girls already have a higher likelihood of achieving a high level of education than boys, mothers seem to invest more time in boys than in girls as the number of children increases. Our …ndings suggest a signi…cant quality-quantity trade-o¤. The level of investment per child is smaller the larger the number of children, thus, this decline in the per-child investment is driven by the time constraint and the opportunity costs of time and not by the properties of the production function technology of children. We, also …nd that quality-quantity trade-o¤ for blacks is signi…cantly larger than that
Abstract In this paper we developed and estimated a model of dynastic households in which altruis... more Abstract In this paper we developed and estimated a model of dynastic households in which altruistic individuals choose fertility, labor supply, and time investment in children sequentially, using data on two generations from the PSID. We then use the estimates to quantify the quality-quantity trade-offs and the return to parental time investment in children. We find that both fathers' and mothers' time investment increases children's outcomes, however, the overall return to fathers' time investment is only 60% that of mothers' time ...
Fewer women than men become executive managers. They earn less, hold more junior positions, and a... more Fewer women than men become executive managers. They earn less, hold more junior positions, and attrit faster. We compiled a large panel data set on executives and formed a career hierarchy to analyze promotion and compensation rates. Given executive rank and background, women are paid more than men, experience less income uncertainty, and are promoted as quickly. Amongst survivors, being
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