We had the pleasure of sharing our research on gender inequality at the Annual Meeting of the Royal Economic Society. The meeting is an outstanding occasion to learn about the knowledge frontier in economics, with amazing keynote speakers, such as Barbara Petrongolo or Stefanie Stantcheva.
The research we presented searches for evidence whether employees engage in statistical discrimination. This form of discrimination is regarded as rational, as employers use the information that is available to them when negotiating wages with prospective employees. If employers perceive that potential employers might become parents during the tenure, they can discount potential costs on wages, even if this particular workers had no fertility intentions. Importantly, if these potential costs differ by genders, then such differences could give rise to a gender wage gap.
Using an instrumental variable approach, we find that an postponing birth by one year leads to a fall in the gender wage gaps of around 3 pp, or around one fourth of the overall wage gap. This finding is consistent with presence of statistical discrimination.
We are grateful to organizers for accepting our paper, and to the fellow presenters for an awesome session. We are looking forward to the next year's meeting