Responsible researcher: Bruno Benevit
Original title: Gender Differences in Job Search: Trading Off Commute Against Wage
Authors: Thomas Le Barbanchon, Roland Rathelot and Alexandra Roulet
Intervention Location: France, United States
Sample Size: 300,000 workers
Sector: Job market
Variable of Main Interest: Salary, Commuting distance to work
Type of Intervention: Difference between men and women
Methodology: OLS, IPW and Logit
Summary
The wage gap between the sexes is commonly associated with the “motherhood penalty”. However, several other factors related to individual preferences have the potential to explain part of this difference. The objective of this article was to identify how much the differences between the sexes in the willingness to travel to work explain the salary difference between men and women. Adopting several empirical strategies, the authors demonstrated that women choose jobs with less commuting, regardless of family composition, age or location. This result is induced by the workers themselves and explains a considerable portion of the wage difference between the sexes.
Studies related to the wage difference between men and women have sought to identify the possible channels that explain this phenomenon. While some studies focus on aspects related to heterogeneity in preferences between the sexes, such as the flexibility of time provided by work (Mas and Pallais, 2017), others evaluate how motherhood impacts women's wages and their careers (Adda, Dustmann and Stevens, 2017).
In this sense, other aspects may be associated with this difference, specifically referring to preferences. Therefore, differences in the willingness to commute at work may be associated with heterogeneity in preferences between men and women. However, identifying average displacement in the labor market is difficult because standard data sets do not measure all relevant job attributes and worker productivity, which can confound the wage effect of the attribute of interest.
Although gender gaps in commuting have narrowed over time in a similar way to gender pay gaps, large gender gaps still exist even when adjusted for workers' experience, occupation, industry, and part-time status. In OECD countries, women spend an average of 22 minutes per day commuting, while men spend 33 minutes. In France, after controlling for the observable characteristics of workers, the difference between women's and men's commuting still amounts to -10% to -15%.
Given the blatant difference in behavior between individuals, the article verified how the difference in willingness to travel to work between men and women may be related to their salary difference.
The article used data from the French labor register of the unemployed, where French job seekers must declare to the Public Employment Service (PES). When registering as unemployed, people are asked about the type of job they are seeking, their reservation salary and the maximum acceptable commute. The preferred occupation may be different from the previous occupation. In response to the reservation wage question: "What is the minimum gross wage you accept for work?", the worker defines a value and chooses a reference unit (hourly, monthly or annually). People are then asked about the maximum acceptable commute or reservation commute: "What length of daily commute (in one direction) would you accept?" Job seekers can respond in minutes or miles. They cannot proceed to the next page of the registration site without providing this information. Before answering questions about desired occupation, reservation salary, and maximum commute, candidates state whether they are willing to accept a temporary contract or part-time job.
All this information allows public employment service employees to select vacancies that will be offered to job seekers. Workers have an incentive to declare their preferences sincerely to the extent that their declarations are relevant to the job search services provided by the PES (Le Barbanchon, Rathelot and Roulet, 2020). Given the cost of searching for jobs that the worker faces, economic theory suggests that the job seeker's best response to the PES is to correctly state the lowest salary he or she would be willing to accept (reservation salary) and the other conditions of employment. relevant to your acceptance. Such data make it possible to combine the advantages in terms of incentives of field experiments (Mas and Pallais, 2017) with the large sample and external validity of administrative data.
The sample used was constructed from information on unemployment records from the fichier historique (FH) of the French public employment service ( Pôle Emploi ), while data on periods of employment were obtained from the Déclarations Aadministratives de Données Sociales (DADS ), from the French Statistics Institute (Insee). The sample includes unemployment insurance beneficiaries whose period of unemployment began between 2006 and 2012. The sample was restricted to people who became involuntarily unemployed, both for permanent and temporary/fixed-term contracts. The analysis period covers the employment history from 2004 to 2012, observing the period before and after unemployment. The main sample comprised around 320,000 observations of periods under unemployment.
The first analysis of the study presented two sets of regressions. The first set presents the regressions referring to salary and displacement to reserve work, controlling for the characteristics of the worker and their preferences. The second set presents regressions regarding salary and distance to work in post-unemployment work.
The second analysis of the article verified possible factors that cause heterogeneity in the differences between men and women. First, it was verified how the family structure causes heterogeneity in preferences related to the variables of interest, dividing workers into single without children, married without children, single with children, and married with children. Second, it was observed how the age of workers affects the difference between the sexes. Finally, heterogeneity was verified between the Paris region and the other regions of France, taking into account the differences in the proportion of use of public transport to work between the regions (43% in Paris and 7% in the rest of the country ).
The third analysis in the article performed the same regressions for the variables of interest of salary and displacement to reserve work using data from workers in the United States from the research sample by Krueger and Mueller (2016).
The fourth analysis conducted an inverse probability weighting (IPW) model to identify the elasticity relationship between commuting and reservation wage. The fifth analysis uses the results of the previous analysis as a tool for how men and women value commuting to work, using the difference in this valuation as a “shock” and verifying how much the differences in salary and commuting to work are explained by this difference in valuation. Both analyzes were separated by sex and family structure
Finally, the article presents two robustness exercises. The first exercise applies a conditional logit model to study the effect of the commuting distance between the vacancy's workplace and the worker's residence on the worker's probability of applying for job vacancies. The second exercise checks whether the difference between the sexes in the commuting distance to work is explained by any bias on the part of employers when hiring.
The results of the first analyzes suggest that unemployed women have a reserve salary for full-time work that is 4% lower than men. Additionally, the difference between the sexes in the maximum acceptable distance for travel is 14%. Observing the effects according to family composition, the difference is 8% for single people and 24% for married people with children. Both differences in reservation wages and shifts to reserve work imply lower wages for women.
Regarding heterogeneous effects, when conditioned on the location of workers, it was identified that the difference between workers residing in the Paris region is smaller than in the rest of France, indicating greater sensitivity among women in relation to access to public transport. The results of the heterogeneous effects conditioned on age suggest that the differences in wages and displacement to reserve work between men and women gradually increase until the age group of 40 years.
Regarding the willingness to pay for a shorter commute to work, it was found that women value this characteristic more at work than men, showing a difference of 18.2%. The value of travel time corresponds to 80% of the gross salary per hour for men and 98% for women. Based on the difference in willingness to pay and keeping all model parameters constant, the authors found that gender differences in the valuation of displacement explain 14% of the gender difference in residualized wages, a value similar to those identified in other studies that evaluate the valuing attributes in job vacancies.
The results of the robustness analyzes corroborate the results found in previous analyses. The logit model reveals a significant gender difference in the valuation of commuting in the order of 14 to 23%. Furthermore, the regressions referring to the demand for work demonstrate that the hiring rate decreases with the distance the candidate travels to the vacancy, but no difference was identified between the sexes. These results indicate that differences between men and women regarding commuting are related to the preferences of workers, not employers.
In this article, the authors conducted several empirical approaches to identify how differences in reservation wages and maximum acceptable travel distance between men and women explain the gender wage gap. The results indicate that women have lower reservation wages and maximum acceptable travel distances, regardless of family composition, age and location of workers. Additionally, the authors presented evidence that these results derive from the labor supply.
The evidence in this article helps to identify factors related to the wage gap between men and women, providing public policy makers with useful information to mitigate this phenomenon. The authors emphasize that, given the greater appreciation of the aspect of commuting to work by women, the consolidation of remote work and the establishment of public urban planning policies that reduce commuting patterns have the potential to make a difference salary.
References
ADDA, J.; DUSTMANN, C.; STEVENS, K. The Career Costs of Children. Journal of Political Economy , vol. 125, n. 2, p. 293–337, apr. 2017.
KRUEGER, AB; MUELLER, AI A Contribution to the Empirics of Reservation Wages. American Economic Journal: Economic Policy , vol. 8, no. 1, p. 142–179, 1 Feb. 2016.
LE BARBANCHON, T.; RATHELOT, R.; ROULET, A. Gender Differences in Job Search: Trading Off Commute Against Wage. The Quarterly Journal of Economics , vol. 136, no. 1, p. 381–426, 22 Dec. 2020.
BUT, A.; PALLAIS, A. Valuing Alternative Work Arrangements. American Economic Review , vol. 107, no. 12, p. 3722–3759, 1 Dec. 2017.
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