Feminist economicsIntroduction and overview

Christine Zulehner

JKU Linz, Wifo

Linz, October 6, 2011

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Feminist economics

Course description

� course in applied economics for master students� we explore feminist aspects of economic theory as well as empirical and

experimental evidence of gender differences

Topics

� household economics, women in the work force� wage differences and wage discrimination, human capital theory,� theories of discrimination, the effect of competition on discrimination� psychological and socio-psychological factors regarding gender

differences in risk preferences, in attitudes towards competition, and inattitudes towards negotiation

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Feminist economics

Target group: Students of business and economics (Master)

Language: English

Grading: class participation (25%), presentation of a paper (25%), termpaper (25%), take home final (25%)

Regular meetings: Thursday, 10.15-11.45, K 224B

Announcements and slides are available on my webpage

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Outline

06/10/11: first meeting

13/10/11 - 17/11/11: lectures, discussion of papers

20/10/11: no lecture

24/11/11 - 26/01/11: students’ presentations, discussion of papers

15/12/12: take home final is given out

26/01/12: deadline for take home final and term paper

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Feminist economics

Literature

� Altonji, Joseph G. and Rebecca M. Blank (1999): Race and Gender inthe Labor Market, in: Orley Ashenfelter and David Card, Handbook ofLabor Economics, Volume 3C, North Holland, Amsterdam, p.3143-3257.

� Bertrand, Marianne (2010): New Perspectives on Gender, in: OrleyAshenfelter and David Card, Handbook of Labor Economics, Volume4B, North Holland, Amsterdam, p 1545-1592.

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Motivation

Income and wage differences in Austria

� Women earn 41% less, fulltime employed women 22% less(Rechnungshof 2008)

Austria’s position in the EU

� Gender pay gap: 25% (incl. wage of part time workers)� Austria is 25th out of 27 countries

Differences between income and wage differences

� How are income and wages are measured?� Yearly income, hourly wages, working time per week

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Introduction

Why do women earn less than men

� What is the effect of labor market participation?� Are there differences in wage determining characteristics between men

and women?� Is there discrimination? or, are there unobserved characteristics?

Definition of wage discrimination from an economic point of view

� different wages despite the same productive characteristics� discrimination taking place not in the labor market is ignored

What are appropriate policies?

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Determinants of labor market participation decision

Labor supply (chapter 6 in Ehrenberg and Smith 2009)

� individual decision to work� trade-off between leisure and work� income effect and substitution effect

Household theory (chapter 7 in Ehrenberg and Smith 2009)

� decision of a household to work� trade-off between homework production and work� income effect and substitution effect� comparative advantage

Participation rates

Microsimulation

Additional literature: chapters 3 and 4 in Blau, Ferber and Winckler (2009)

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Determinants of wages

Compensating wage differentials (chapter 8 in Ehrenberg and Smith 2006)

� Adam Smith: “the wages of labour vary with ease or hardship, thecleanliness or dirtiness, the honourableness and dishonourableness ofthe employment”

� observed wage differentials reflect in part workers’ tastes for variousamenities and disamenities.

Human capital theory

� schooling as investment (chapter 9 in Ehrenberg and Smith 2006)� dynamic framework: costs vs. benefits from schooling

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Determinants of wages

Horizontal segregation

� occupational segregation and differences in investment into humancapital (Polachek 1981)

� reply to Polachek (England 1982)

Vertical segregation (promotion tournaments)

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Wage differences between women and men

discrimination vs. differences in human capital (chapter 12 in Ehrenberg andSmith 2006, Winter-Ebmer and Zweimuller 1994, Boheim et al. 2007,Grunberger and Zulehner 2009, Boheim et al. 2011a, Boheim et al. 2011b)

∗∗ preferences and investment into human capital (Goldin and Katz 2002)

∗∗ occupational segregation (Groshen 1990, Bayard et al. 2003)

top corporate jobs (Bertrand and Hallock 2001, Yurtoglu und Zulehner,2006)

∗∗ career interruptions and working time (Bertrand, Goldin and Katz 2009)

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International comparisons

∗∗ comparison across Europe (Arulampalam, Booth, and Bryan 2007,Ponthieux and Meurs 2005)

∗∗ global gender report

further country differences (Blau 1998, Blau and Kahn 1992, 1996, 2003)

metaanalysis (Weichselbaumer and Winter Ebmer 2005, 2007)

∗∗ effect of participation (Olivetti and Petrongolo 2008)

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Econometric methods (Berndt 1991, Wooldridge 2003)

estimation of wage functions: OLS, Heckman procedure

decomposition techniques

quantile regressions

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Results for Austria

Determinants of labor market participation

� traditional society, women take care of children� few child care facilities for 0-3 year olds → high female part time rate

Wage differences in 2007 (full time employed)

� 18,1% → 11,0% (private and public sector)� 23,4% → 12,6% (private sector)

Determinants

� education, experience, horizontal and vertical segregation� discrimination vs. differences in unobserved characteristics

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Discrimination and affirmative action

Employer discrimination, i.e. taste for discrimination (Becker 1957)

� source of discrimination is personal prejudice� discriminatory employers maximize utility, not profits� less than the optimal number of women are employed� competitive mechanisms should ensure that discriminators are replaced

by less prejudiced firms

Statistical discrimination (Aigner and Cain 1986)

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Empirical Evidence

Direct evidence of discrimination

� ∗ audit study (Bertrand and Mullainathan 2003)� ∗ admission to orchestras (Goldin und Rouse 2000)

Empirical tests of Becker’s model

� ∗ government regulation (Ashenfelter and Hannan 1986, Black andStrahan 2001)

� ∗ international competition (Black and Brainerd 2004, Weichselbaumerand Winter-Ebmer 2007)

� ∗ correlation between female employment and profitability among firms(Hellerstein et al. 2002, Kawaguchi 2007)

� firm selection (Weber and Zulehner 2009, 2011)

∗ test for statistical discrimination (Altonji and Pierret 1997)

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Differences in unobserved characteristics

∗ preferences, risk aversion (Dohmen et al. 2010, DeLeire and Levy 2004)

∗ wage negotiations (Riley, Babcock and McGinn 2005)

∗ behavior in competition → women in top positions (Niederle andVesterlund 2007, Gneezy, Niederle and Rustichini 2003, Lavy 2008)

∗ nature vs. nurture (Gneezy et al. 2008, Booth and Nolen 2009a,b)

∗ effect of psychological factors in explaining the gender gap (Manning andSwaffield 2008)

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Policies to reduce discrimination

∗ statistical discrimination and affirmative action (Lundberg and Startz1983)

∗ competition and affirmative action (Balafoutas and Sutter 2010)

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Plan of the course

06/10/11: Introduction and overview

13/10/11: Labor supply and household theory

20/10/11: no lecture

27/10/11: Wage determinants

03/11/11: Empirical evidence for wage differences between women and men

10/11/11: International comparison

17/11/11: Theories of discrimination

24/11/11: Direct evidence of discrimination

01/12/11: Empirical evidence of discrimination

15/12/11: Differences in preferences (risk aversion), wage negotiations

12/01/12: Behavior in competition

19/01/12: Nature vs. nurture

26/01/12: Policies to reduce discrimination, Take home final is due

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Students’ presentations

24/11/11: Direct evidence of discrimination

� audit study (Bertrand and Mullainathan 2003)� admission to orchestras (Goldin und Rouse 2000)

01/12/11: Empirical evidence of discrimination

� government regulation (Black and Strahan 2001)� international competition (Black and Brainerd 2004)� correlation between female employment and profitability among firms

(Hellerstein et al. 2002)

15/12/11: differences in preferences (risk aversion), wage negotiations

� risk aversion (Dohmen et al. 2010, DeLeire and Levy 2004)� wage negotiations (Riley, Babcock and McGinn 2005)

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Students’ presentations

12/01/12: behavior in competition

� selection into competition (Niederle and Vesterlund 2007)� behavior in competitions (Gneezy, Niederle and Rustichini 2003)� empirical evidence (Lavy 2008)

19/01/12: nature vs. nurture

� patriarchy vs. matriarchy (Gneezy et al. 2008)� role of eduction (Booth and Nolen 2009a,b)

26/01/12: effect of psychological factors in explaining the gender gap, policies to

reduce discrimination, take home final is due

� effect of psychological factors (Manning and Swaffield 2008)� statistical discrimination and affirmative action (Lundberg and Startz

1983)� competition and affirmative action (Balafoutas and Sutter 2010)

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