Career Dynamics: A Longitudinal Analysis of US Firms and Households

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This proposed research will use a large and rich data set to study the sources of the gender earnings (the gap) that widens over the work cycle. It will focus on married couples to explore the costs of flexible and lower-hour jobs, the role of geographic moves that favor one member of the couple over the other, and the relative impact on women of working for lesser-paying firms versus lower wage growth within firms to explain the gap. Despite progress in education and the workplace, women still earn less than men, even when adjusted for education, hours of work, and experience. The Bureau of Labor Statistics' gender earnings gap in the US is around 20 percent for full-time workers. The gap, however, is not a single number. Rather, it is a shifting statistic across lifetimes. The earnings gap for women relative to comparable men is small directly after education is completed. However, the gap widens substantially with family formation, particularly among the most educated. Reducing or eliminating the gender earnings gap has surfaced recently as an issue of vital policy importance. The results of this research will improve the efficiency of the labor market, hence spur economic growth as well as lead to gender equity. The proposed research will construct, and use a large and extraordinary dataset to explore the complicated dynamics of the gender earnings gap (the gap). The research will broaden and deepen our understanding of the widening gender earnings gap by following couples, across time and around critical events, such as marriage and births. The research will use the Longitudinal Employer-Household Dynamics (LEHD) dataset linked to the US Census, CPS, and ACS survey data. The LEHD gives longitudinal information on individual employee earnings by firm. The linkages to census data will provide further information on the employees and the employment and workplaces of each spouse. The PIs will also be able to perform event studies of earnings and employment responses following changes such as marriage, birth, and household residence and employment moves. The expanded LEHD data platform will make it possible to estimate the impact of tied-stayer, tied-mover effects, do various types of event studies, and link firms to their stated family-friendly policies. The LEHD-Census data makes it possible to analyze important life events and connect the results to existing firm-level policies that are relevant for policies to close the gaps in earnings and employment.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.