Date of Award
Doctor of Philosophy (PhD)
Frictions in the labor market are important forces driving the unequal outcomes in wages, mobility, and work arrangements. I study the life cycle gender wage gap and alternative work arrangements in labor markets with information frictions and search frictions.
The first chapter proposes a novel mechanism behind the life cycle gender wage gap: female workers are offered wage contracts that suppress future job mobility because of employers’ screening under asymmetric information about female job attachment. Job attachment is lower among women than men, with substantial individual-level heterogeneity. Employers value job attachment but job attachment is not directly observed. I show that the information problem of female job attachment is detrimental to female labor market outcomes. I propose a model where there is information asymmetry about female job attachment but not about male job attachment in a frictional labor market. To screen for female job attachment, employers offer separating wage contracts that distort the wage profiles of high-attachment women. The distortions suppress female job-to-job mobility, resulting in worse labor market outcomes than comparable men.
The second chapter empirically investigates the life-cycle gender differences in labor market outcomes, based on the theoretical framework developed in the previous chapter. Using data from the National Longitudinal Survey of Youth, I document substantial gender differences in the likelihood of employment-to-nonemployment transitions, confirming the central assumption of the theoretical model. I document empirical evidence on the gender differences in job mobility and wage return to tenure, consistent with the theoretical predictions. I quantitatively implement the model and assess the contributing factors to the gender wage gap. The parameterized model generates gender gaps in wage growth and distribution along the job ladder. I show that the gender differences in the job value distribution are the main contributor to the gender wage gap.
The third chapter studies alternative work arrangements in an environment with moral hazard and adverse selection. Workers are hired on a per-task basis, whose effort and marginal product may not be observed. The employer chooses between offering a bonus contract and selling off the task. Bonus contracts provide workers with insurance against output risks but subject them to organizational uncertainty. Allowing workers to buy out the task induces higher worker effort but provides no risk sharing. I characterize the tradeoff between the two arrangements. Adverse selection limits the use of the latter arrangement on low marginal product workers and hence the employer’s ability to induce their effort.
Wang, Ni, "Essays On Inequality And Frictions In The Labor Market" (2022). Publicly Accessible Penn Dissertations. 5599.