Changes in Gender Equality on the Labor Market: How Do Business Students Update Their Beliefs of Future Earnings in Response?

Do improved earnings and gender equality among recent graduates lead to updating of beliefs among current students at the same business school? Do beliefs influence realized earnings, helping to explain one source of the persistent gender earnings gap? Using unique panel data, fixed effects and two-stage least-squares models with exogenous market conditions, we find that only female business students are insensitive to changes in gender equality and that earnings beliefs drive the future gender gap in earnings. We find no evidence that current labor market conditions explain why female students systematically hold lower beliefs of earnings than male students.

Keywords: Labor Economics, Gender Equality, Beliefs, Earnings, Expectations

JEL Classification: J3, J16

Suggested Citation: Suggested Citation

Fröberg, Emelie and Säve-Söderbergh, Jenny and Wahlund, Richard and Wakeman, S. Wiley, Changes in Gender Equality on the Labor Market: How Do Business Students Update Their Beliefs of Future Earnings in Response? (July 7, 2023). Available at SSRN: https://ssrn.com/abstract=4458264 or http://dx.doi.org/10.2139/ssrn.4458264