Principal investigator: Bruno Benevit
Original title: Gender Differences in Job Search: Trading Off Commute Against Wage
Authors: Thomas Le Barbanchon, Roland Rathelot and Alexandra Roulet
Location of the Intervention: France, United States
Sample Size: 300.000 workers
Sector: Job market
Primary Variable of Interest: Salary, Commuting distance to work
Type of Intervention: Diferença entre homens e mulheres
Methodology: OLS, IPW and Logit
Summary
The gender pay gap is commonly associated with the "penalty of motherhood." However, several other factors related to individual preferences have the potential to explain a portion of this difference. The aim of this article was to identify how much gender differences in willingness to commute to work explain the gender pay gap. Using various empirical strategies, the authors demonstrated that women opt for jobs with less commuting time, regardless of family composition, age, or location. This result is driven by the workers themselves and explains a considerable portion of the gender pay gap.
- Policy Problem
Studies related to the gender pay gap have sought to identify the possible channels that explain this phenomenon. While some studies focus on aspects related to heterogeneity in gender preferences, such as the time flexibility provided by work (Mas and Pallais, 2017), others assess how motherhood impacts women's salaries and careers (Adda, Dustmann, and Stevens, 2017).
In this sense, other aspects may be associated with this difference, specifically regarding preferences. Therefore, differences in willingness to commute at work may be associated with heterogeneity in preferences between men and women. However, identifying the average commute in the labor market is difficult because standard datasets do not measure all relevant job attributes and worker productivity, which can confound the wage effect of the attribute of interest.
- Implementation and Evaluation Context
Although gender differences in commuting time have narrowed over time, similarly to the wage gap between men and women, significant gender differences still exist even when adjusted for workers' experience, occupation, sector, 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 observable worker characteristics, the difference in commuting time between women and men still reaches -10% to -15%.
Given the striking difference in behavior between individuals, the article investigated how the difference in willingness to travel for work between men and women may be related to their wage gap.
- Policy/Program Details
The article used data from the French employment registration system for the unemployed, where French job seekers must declare their status to the Public Employment Service (PES). When registering as unemployed, people are asked about the type of job they are seeking, their reserve salary, and the maximum acceptable commute. The preferred occupation may be different from the previous occupation. In response to the question about the reserve salary: “What is the minimum gross salary you would accept to work?”, the worker sets a value and chooses a reference unit (hourly, monthly, or annually). Next, people are asked about the maximum acceptable commute or reserve commute: “What is the length of the daily commute (in one direction) that you would accept?” Job seekers can answer in minutes or kilometers. They cannot proceed to the next page of the registration website without providing this information. Before answering the questions about the desired occupation, reserve salary, and maximum commute, applicants state whether they are willing to accept a temporary contract or a part-time job.
All this information allows public employment service officials to select the vacancies that will be offered to job applicants. Workers have an incentive to state their preferences truthfully insofar as their statements are relevant to the job search services provided by the PES (Le Barbanchon, Rathelot, and Roulet, 2020). Given the cost of job searching that workers face, economic theory suggests that the best response from a job applicant to the PES is to correctly state the lowest salary they would be willing to accept (reservation wage) and other pertinent conditions for its acceptance. Such data allows combining the incentive advantages of field experiments (Mas and Pallais, 2017) with the large sample size and external validity of administrative data.
- Method
The sample used was constructed from information on unemployment records from... historical file (FH) of the French public employment service (Pôle Emploi), while the data on employment periods were obtained from Declarations Aadministratives de Données Sociales (DADS), from the French National Institute of Statistics and Economic Studies (Insee). The sample includes unemployment insurance recipients whose unemployment period began between 2006 and 2012. The sample was restricted to individuals who became involuntarily unemployed, both for permanent and temporary/fixed-term contracts. The analysis period covers employment history from 2004 to 2012, observing the period before and after unemployment. The main sample comprised approximately 320.000 observations of periods of unemployment.
The first analysis of the study presented two sets of regressions. The first set presents regressions related to salary and commute to reserve work, controlling for worker characteristics and preferences. The second set presents regressions related to salary and commute to work after unemployment.
The second analysis of the article examined possible factors that cause heterogeneity in the differences between men and women. First, it verified how family structure leads to heterogeneity in preferences related to the variables of interest, dividing workers into single people without children, married people without children, single people with children, and married people with children. Second, it observed how the age of workers affects the difference between the sexes. Finally, it verified the heterogeneity between the Paris region and the other regions of France, taking into account the differences in the proportion of use of public transport for work between the regions (43% in Paris and 7% in the rest of the country).
The third analysis presented in the article performed the same regressions for the variables of interest, salary and commuting time for reservation work, using data from workers in the United States from the sample of the Krueger and Mueller (2016) survey.
The fourth analysis employed an inverse likelihood 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 to understand how men and women value commuting, using the difference in this valuation as a "shock" and verifying how much the differences in wages and commuting are explained by this difference in valuation. Both analyses 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 commute distance between the job location and the worker's residence on the probability of the worker applying for job openings. The second exercise verifies whether the difference between genders in commute distance is explained by any employer bias in hiring.
- Main results
Initial analyses suggest that unemployed women have a 4% lower reservation wage for full-time jobs compared to men. Additionally, the gender difference in the maximum acceptable commute distance is 14%. Considering the effects of family composition, the difference is 8% for single people and 24% for married people with children. Both the differences in reservation wage and commute distance imply lower wages for women.
Regarding heterogeneous effects, when conditioned on the workers' location, it was identified that the difference for workers residing in the Paris region is smaller than in the rest of France, indicating greater sensitivity among women regarding access to public transport. The results of the heterogeneous effects conditioned on age suggest that the differences in wages and commuting time between men and women gradually increase up to the age of 40.
Regarding willingness to pay for a shorter commute, it was found that women value this characteristic of work more than men, showing a difference of 18,2%. The value of commuting time corresponds to 80% of the gross hourly wage for men and 98% for women. Based on the difference in willingness to pay and keeping all model parameters constant, the authors concluded that gender differences in the valuation of commuting time explain 14% of the gender difference in residual wages, a value similar to those identified in other studies that assess the valuation of attributes in job vacancies.
The results of the robustness analyses corroborate the findings of previous analyses. The logit model reveals a significant gender difference in the valuation of commuting, ranging from 14 to 23%. Furthermore, regressions related to job demand demonstrate that the hiring rate decreases with the distance the candidate travels to the job, but no difference was identified between the sexes. These results indicate that the differences between men and women regarding commuting are related to the preferences of workers, not employers.
- Lessons in Public Policy
In this article, the authors conducted several empirical approaches to identify how differences in reservation wages and maximum acceptable commuting distance between men and women explain the gender pay gap. The results indicate that women have lower reservation wages and maximum acceptable commuting distance, regardless of family composition, age, and worker location. Additionally, the authors presented evidence that these results stem from labor supply.
The evidence presented in this article helps to identify factors related to the gender pay gap, providing policymakers with useful information to mitigate this phenomenon. The authors emphasize that, given women's greater emphasis on commuting time, the consolidation of remote work and the establishment of urban planning policies that reduce commuting patterns have the potential to address the wage gap.
References
ADDA, J.; DUSTMANN, C.; STEVENS, K. The Career Costs of Children. Journal of Political Economy, v. 125, no. 2, p. 293–337, apr. 2017.
KRUEGER, AB; MUELLER, AI A Contribution to the Empirics of Reservation Wages. American Economic Journal: Economic Policy, v. 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, v. 136, n. 1, p. 381–426, 22 Dec. 2020.
BUT, A.; PALLAIS, A. Valuing Alternative Work Arrangements. American Economic Review, v. 107, n. 12, p. 3722–3759, 1 Dec. 2017.
