Womens Occupations and Family Choices Mark R' Allyn School of Business Montclair State University

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Womens Occupations and Family ChoicesMark R.
Allyn School of BusinessMontclair State
University

• Work Family A Balancing Act
• New Jersey Center for Regional Business
• March 23, 2000

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Work Force Macro Changes
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How Have Women Managed Work and Home During This
Transition?
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Without a Lot of Help from Hubby!
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Occupation Fundamentals

• Gender Segregation of Occupations is striking
• At broad occupational levels
• Even more so with narrowly defined job titles
• During the 80s Gender Segregation Began to
  Decline
• Correspondingly, the Wage Gap Closed

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Occupations and Gender Percentages

1996 U.S.Census
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Human Capital Theory

• Workers evaluate investments in themselves just
  like firms do
• Uninterrupted employment is critical factor
  affecting wages
• Firm specific training is a crucial investment
• Human capital investments depreciate

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Human Capital Changes in the Female Labor Force

• Years and types of schooling
• Womens schooling has increased
• Womens occupational choices are in
  higher-skilled jobs
• Work experience
• Tenure with employer has increased
• Specific Vocational Preparation has increased

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Womens Work Childrens Impact

• Employment interruptions damage wage rates
• Sharp reduction in earnings in next job
• Children reduce earnings by interfering with
  human capital investments
• Housework damages wage rates
• Conservation of effort damages wage rates
• Direct effect of children on wage rate due to
  allocation of effort to child rearing

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Children Womens Wages
Controlling for age, children seem to depress
wages
kids
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Untangling Occupations, Wages, and Family Choices

• Occupations have significant impacts on wages
• Occupation preferences depend upon wages and
  family plans
• Skills acquisition depend upon wages and
  occupational requirements

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A Model for Fertility, Occupation, and Wages
Occupation
Wages
Skill
Fertility
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Current Population Survey Data Set

• Approximately 4000 American women
• 19 to 45 years of age in June 1998
• Asked how many live births
• And a number of other questions concerning
  marriage, education, occupation, and earnings

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Cognitive Skills and Wages

• Reported BLS/Census occupations coded for General
  Educational Development (GED) and Specific
  Vocational Preparation (SVP)
• Occupations coded for DOL Dictionary of
  Occupational Titles job complexity factors
• Data
• People
• Things

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Occupational Requirements Drive Cognitive Skill
Acquisition

• Analysis indicates that General Educational
  Development (GED), Specific Vocational
  Preparation (SVP), and formal years of education
  load on two Cognitive Factors
• Cognitive Factor 1 has very high loadings on GED
  and SVP and modest loadings on Formal Education
• Cognitive Factor 2 has very high loadings on
  Formal Education and modest loadings on GED SVP

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Fertility, Cognitive Skills, and Wages
The Fitted Model-
Log Wages 1.69 .06kids .28CogFact1
.05Urban .01Age .26Union -.04South
Cognitive Skill F1 1.84 .30LnWage -.14Union
-.54Data -.02People .10Strgth
-.10Things
Fertility -.41LnWages -.15CogFact1 .08Age
-.66SpouseNo .12Urban
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Fertility, Wages, and Cognitive Skill Trade-Offs
Job Complexity
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The Role of Formal Education

• Years of Formal Schooling by themselves do not
  appear to play a major role in determining wage
  outcomes (Cognitive Factor 2 did not predict wage
  rates)
• Years of Formal Schooling Combined With On the
  Job Training are Powerful determinants of wages
  and fertility, but
• Formal Schooling needs to provide complex data
  skill acquisition and people management tools

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Summary

• There is a Statistical Tradeoff Women Seem to
  Make Between Family Size and Job Skill
  Acquisition
• Wages Mediate the Family Size and Job Skill
  Relationship
• As Wages for Skills Increase with Job Complexity
  and Investments in Cognitive Skills Increase,
  Family Size Diminishes
• Men have been on the sidelines

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Job Complexity
Figure 1. Relationship between wages, fertility,
and acquired cognitive skills