“The Underworked American? Explaining the Rise and Fall in Long Workweeks” (new draft available soon)
I document that work-hours have been increasing in the United States between the 1980s and the mid-1990s, before steadily declining until the end of the 2010s. These trends were predominantly driven by secular changes in the share of young, salaried employees working long hours (more than 40 hours per week) in high-pay jobs. Using a Gicheva (2013)-type model where long work-hours increase young workers’ promotion probabilities in career-oriented jobs, I show that the inverted U-shaped trend in overtime work can be explained by changes in labor demand that increased (in the 1980s-1990s) and decreased (in the 2000s- 2010s) the life-cycle wage premia that young employees expect to obtain when supplying overtime work hours. In the model, changes to the life-cycle wage premia from working long hours also result into changes in the spread of permanent income across employees supplying different amounts of work-hours. I then estimate long-run trends in persistent and transitory wage dispersion and show that persistent wage dispersion grew in the 1980s and 1990s and declined thereafter. Thus, the increase and decline of life-cycle wage premia for working long hours reconcile the inverted U-shaped trends both in overtime work and in persistent wage dispersion. These results are suggestive that, after surging in the 1980s and 1990s, the “fortunes of the youth” (Beaudry, Green & Sand 2014) may have been declining later on, due to shifts in labor demand that flattened the life-cycle wage profiles that young, salaried employees can obtain when supplying long work-hours.
"Are We There? The Search for Amenities and the Early Career Gender Wage Gap" (new draft available soon)
I study the contribution of search frictions, preferences for amenities (flexibility and parental leave), and wage offers to the early career gender pay gap among US college graduates. Using data from the NLSY97, I document that highly educated Millennial women earn $1.80 less than men, per hour, by five years since labor market entry, irrespective of their marital and parental status, largely due to gender-differences in wage gains from job changes. Motivated by this evidence, I estimate a structural model that allows to disentangle the impact of the main determinants of returns to job changes, that is, search frictions, preferences for amenities, and wage offers on the pay gap. I find that young men and women share similar preferences for amenities. Compared to men, however, women are offered lower wages, and predominantly so in jobs that provide benefits. Since these jobs typically offer higher wages too, the gender pay gap expands as workers climb the job ladder to enter employment relationships that offer better wage-benefits bundles. The higher price that women pay for amenities explains 42% of the early-career growth in the wage gap in the model. The remaining portion is explained by the lower wages offered to women in jobs that do not provide benefits (25%) and by women’s stronger search frictions (33%).