Academic Literature

Gender Differences in Occupations in US – Risk aversion and attitudes toward competition, a clear scope for future

The differential sorting of men and women into different occupations could be an important channel through which gender wage differences are maintained. At the same time, the same factors that lead men and women to choose different occupations may also have a direct effect on the gender wage gap. Over the last decade, labor economists have increasingly moved beyond the traditional focus on human capital differences and discrimination to explain gender differences in labor market outcomes. We reviewed three broad classes of explanations that have been the subject of much of the recent empirical work. These new classes of explanations have a lot of potential to improve our understanding of the underlying causes of gender differences in occupations and how occupation and gender interact to affect gender wage gaps. Nonetheless, there is clear scope for future work to address the gaps in the current literature.

While gender differences in behavioral traits such as risk aversion and attitudes toward competition are quite well established in the laboratory and field, and have been shown to matter for labor market outcomes in some settings, more work needs to be done to assess the quantitative relevance of these factors for observed gender differences in occupational choice and wages. Studies that use observational data to link measured preferences, job attributes, and occupation and wage outcomes offer some promise in addressing this question. Nonetheless, such regression-based studies may be susceptible to issues relating to the endogeneity of preferences for certain job attributes. Moreover, to the extent that the share of women in an occupation might affect the workplace environment and measured occupational characteristics, there is a concern of reverse causality. Furthermore, it is challenging to attach a causal interpretation to the various behavioral/personality traits or occupational attributes included in this model, since there is a question about precisely what it is that these variables are capturing, and whether the observed relationships may be capturing omitted factors. Therefore, such evidence based on survey data may need to be combined with well-designed experiments in the field and/or plausible sources of exogenous variation in order to credibly identify how gender differences in preferences and behavior shape labor market outcomes.

Another aspect that would benefit from future research is an investigation of the sources of gender differences in behavioral traits and preferences. The extent to which the observed gender differences in tastes and preferences for particular job attributes are due to biological differences between men and women (nature) or are shaped by the social environment (nurture) remains an open question. The potential role of nurture in shaping these preferences and labor market outcomes is particularly important for thinking about policy responses. Risk preferences, attitudes toward competition, and social preferences may be components one’s gender identity, and the strength of these preferences may be influenced by the presence of social norms that dictate what the appropriate behavior of women (and men) should be. Furthermore, gender differences in preferences for workplace flexibility are likely to have its roots in the traditional gender division of labor in the household, which in turn, could be maintained by an adherence to gender identity norms. To the extent that gender identity and social norms may be an important underlying cause, it would be important to understand what drives these norms. Several papers have evaluated historical factors that may have affected these norms such as the advent of the Pill and WWII. Additional research on the role of social factors in shaping gender identity norms can help further our understanding on viable policy initiatives to address the remaining labor market gaps.

Finally, to the extent that gender differences in household roles remain pervasive, occupational differences in the degree of workplace flexibility is likely to have a differential effect on men and women. Moreover, the secular increase in workplace time demands over time in the United States suggests that this factor is likely to become an increasingly binding constraint for women seeking to effectively combine career and family. What remains less well-understood is why some occupations have a larger demand for long (and particular) work hours than others, and why the demand for workers to put in long (and particular) hours has increased differentially across occupations and countries. Understanding the relative importance of underlying causes of these changes – e.g. changes in compensation schemes, technological change, market structure, globalization – and how they may have influenced organizational practices and workplace cultures, can help to facilitate the design of policies. At the same time, a careful exploration of how occupations have successfully re-organized their workplace environment to accommodate greater flexibility could provide valuable lessons for ways to enhance temporal flexibility in occupations.

Our review of the recent literature offers a number of policy implications for tackling occupational segregation and gender pay differentials. The importance of social norms and gender identity considerations in shaping occupational choice (perhaps by affecting men and women’s tastes and preferences for certain occupational attributes) suggest that policies aimed at removing gender stereotypes and changing gender norms could have potentially large pay-offs. Such policies could include exposing more women to traditionally male subjects (e.g. science, technology, engineering, and mathematics (STEM) fields) early on in school, efforts to encourage the hiring of women in male-dominated professions, as well as incentives and policies to retain women in these fields. Moreover, given gender differences in household responsibilities, policies that increase the availability of household substitutes (e.g. immigrant domestic help and affordable high quality childcare) and promote workplace flexibility can help to relax some of the constraints that women face in seeking to pursue careers in occupations that require a high degree of time commitment.

Chosen excerpts by Job Market Monitor. Read the whole story at IZA – Occupation and Gender

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