Gender Wage Gaps and Risky vs. Secure Employment: An Experimental Analysis

35 Pages Posted: 22 Aug 2016

See all articles by SeEun Jung

SeEun Jung

Inha University - Department of Economics

Chung Choe

Hanyang University

Ronald L. Oaxaca

University of Arizona - Department of Economics; IZA Institute of Labor Economics

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. That women were more risk averse than men was also manifest in the Pratt-Arrow Constant Absolute Risk Aversion parameters estimated from a random utility model adaptation of the mean-variance portfolio model.

Keywords: occupational choice, gender wage differentials, risk aversion, lab experiment

JEL Classification: J16, J24, J31, C91, D81

Suggested Citation

Jung, SeEun and Choe, Chung and Oaxaca, Ronald L., Gender Wage Gaps and Risky vs. Secure Employment: An Experimental Analysis. IZA Discussion Paper No. 10132. Available at SSRN: https://ssrn.com/abstract=2826926

SeEun Jung (Contact Author)

Inha University - Department of Economics ( email )

253 Yonghyun-dong
Nam-gu Incheon 402-751
Korea

Chung Choe

Hanyang University ( email )

Ansan
Korea, Republic of (South Korea)

HOME PAGE: http://https://sites.google.com/site/choechung/home

Ronald L. Oaxaca

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States
520-621-4135 (Phone)
520-621-8450 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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