Care Occupations, Gender, and Markets
Paper Session
Saturday, Jan. 4, 2025 8:00 AM - 10:00 AM (PST)
- Chair: Aida Farmand, University of California-Berkeley
Unraveling the Gender Wage Gap: The Influence of Monopsony Power and Labor Market Concentration
Abstract
This paper analyzes the influence of monopsony power on the gender wage gap in the United States with American Community Survey data. Monopsony power is proxied with labor market concentration by calculating Herfindahl-Hirschman indices measuring occupational concentration by industry. The analysis reveals that occupations with the highest Herfindahl-Hirschman index are those with very specialized job tasks that are directly related to the main activities of the industries in which they are concentrated, such as education or healthcare occupations. A quarter of the female workforce is employed in these highly concentrated occupations, compared to about 7% of men. The emphasis on labor market concentration provides a different perspective related to employers rather than workers characteristics and offers alternative explanations for monopsony power rather than blaming workers search costs or geographical location. I claim that women do not necessarily self-select into certain occupations but are pushed into them by social expectations and the double burden of paid and unpaid work, and that low wages are not inevitably determined by the choice of the occupation itself but by the unequal power relations between monopsonistic firms and employees within the occupations. The result of an Oaxaca-Blinder decomposition shows that labor market concentration and thus monopsony power is a key component in explaining the gender wage gap among the bottom 20% of the wage distribution and also factors into pay gaps for the top 30%.Effect of Child Care Regulations on Child Care Markets: Evidence from Policy Discontinuity at the Border
Abstract
Workforce participation among mothers with children under the age of 6 has increased in recent decades, with about seven in 10 mothers participating in the labor force in 2022 (BLS 2023). Despite the need for accessible childcare services, a significant majority of families with young children find themselves residing in what has been called a "childcare desert" (Malik et al., 2020). Regulations tend to increases child care quality at the cost of the quantity of slots, disproportionately impacting local markets with higher concentrations of low-income parents (Hotz and Xiao, 2011). Building upon the previous research, this study aims to estimate the effects of child care regulations on child care market supply using a different methodology than prior work. Variation in state licensing regimes makes comparisons across states based on public licensing data challenging to interpret. Instead, to get a nationwide, cross-state consistent measure of provider locations and sizes, this study uses a Dunn and Bradstreet provider panel from 2011 to 2017. It is combined with state-year regulation policy data sourced from the National Association for Regulatory Administration (NARA)'s Child Care Licensing Programs and Policies Survey. The survey allows us to create a composite index of regulatory stringency based on multiple dimensions of regulation, including building/environmental safety, teacher-to-child ratio, teacher quality, training requirements, and so forth. This paper exploits policy discontinuity around state borders and uses a regression discontinuity design framework to investigate how differing levels of regulatory stringency impact supply in geographically proximate regions.The Equilibrium Effects of State-mandated Minimum Staff-to-child Ratios
Abstract
Mandatory minimum staff-to-child ratios are a pervasive childcare market regulation in the US, and yet little is known about their effects on children’s skills. This paper builds an equilibrium model of the childcare market and uses it to simulate the distribution of children’s skills at preschool entry under various minimum mandatory staff-to-child ratios. The model allows for rich family heterogeneity, an endogenous distribution of childcare quality at each age, and endogenous wages that clear the market for teachers and childcare workers. I prove identification andestimate the model using both individual-level and state-level data. Counterfactual simulations show that increasing the stringency of minimum mandatory staff-to-child ratios increases the wages of childcare workers by up to 4.33% and wages of lead teachers by up to 2.75%. Despite making paid childcare more expensive, more stringent regulations increase the level of skills at kindergarten entry for each percentile of the skill distribution, except for the lowest percentiles. The effects on the skill distribution are more pronounced for children born to single mothers than those born to two-parent families. Finally, these overall effects on the skill distribution mask large heterogeneity: Increases in ratios’ stringency translate into big skill gains for some children and large drops for others. Both family characteristics and the equilibrium adjustment of teacher’s wages are key in determining the children who gain and lose.
Discussant(s)
Michelle Holder
,
John Jay College
Ofronama Biu
,
The Urban Institute
JEL Classifications
- J1 - Demographic Economics