Date of Award

5-14-2023

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Alfonso Flores-Lagunes

Abstract

This dissertation presents three separate essays. The first two essays explore the gender wage gap and its dynamics in urban China from 1995 to 2018. The first chapter decomposes the gender wage gap based on the observed wage for workers with a precise measure of the hourly wages. The first chapter examines the observed average gender wage gap in China in hourly wages from 1995 to 2018. Using data from the China Household Income Survey (CHIP) 1995 – 2013 and the China Family Panel Studies (CFPS) 2014 and 2018. This chapter computes wage earners' working hours and hourly wages based on the available information to account for the labor supply's intensive margin. This chapter shows a pattern of increase in the gender wage gap in terms of hourly wages in the survey years of 1995-2007 and a pattern of decrease in 2007 - 2013. By extending the study period to 2018, this paper provides additional evidence that the observed wage-earners gender wage differentials have continued to decrease from 2013 - 2018 in urban China. This chapter finds that educational achievement and the returns to education favor female workers on average; however, the returns to potential experience are the main contributors to the ``unexplained" component of the gender wage gap. This chapter also finds that the changes in the gender wage gap are heterogeneous across groups. Individuals without a college degree and working in foreign-owned firms are more likely to experience gender wage differential changes in hourly wages compared with those with at least a college degree and working in State-Owned Enterprises(SOEs).

The second chapter explores the gender wage gap dynamics by accounting for employment composition. This chapter examines changes in the gender gap of the wage distribution in China from 1995 to 2018. To effectively account for changes in employment composition, we employ nonparametric bounds. Our methodology adopts a weak quartile dominance assumption, a monotone instrumental variable, and a stochastic dominance assumption to tighten the bounds. The results show statistically significant evidence that, over the years from 1995 to 2018, the median gender wage gap for the young workers (age 25-45) who are non-college-educated has increased by 0.17 - 0.62 log points. To estimate potential changes in the evolution of the gender wage gap suggested in the literature, we split up our analysis into two periods from 1995 - 2007 and 2007 - 2018. The results show larger changes in the gender wage gap compared to estimates in existing studies. In the eailer period, we find a significant increase by 0.19 - 0.63 log points in the median gender wage gap among the young workers who are college-educated. In the second period, the bounds estimates are less conclusive and suggest a decrease in the median gender wage gap among the college-educated young workers by 0.12 - 0.59 log points, but their 95\% CI does not exclude a zero change. The estimates of the gender wage gap at the $75^{th}$ wage percentile show a similar pattern as the changes at the median wage, while the statistical implications at the $25^{th}$ percentile are inconclusive.

Chapter three examines the returns to higher education in the United States with particular attention to individuals induced by the recession to attend a Master’s Program. Unlucky college undergraduates entering the labor market in a recession suffer a persistent loss in their earnings in the medium- to long-term. Due to this ``scarring effect," the opportunity cost for graduate school attendance decreases when an individual is exposed to a recession. This paper examines whether staying in school can help the unlucky cohort in terms of future labor market outcomes. There are two channels: delaying the time to enter the labor force and human capital accumulation. I find that graduating during a recession increases the probability of pursuing a graduate degree by 3 percentage points, and the return for the induced graduate degree is about 23\% in future annual salary. At the same time, there is no statistically significant effect on the employment probability for those graduate degree holders induced by the recession. These findings provide evidence that the main benefit those induced graduate degree holders gain is from the additional accumulated human capital; the effect of delayed labor force entrance is negligible. I also find younger non-white females in non-STEM majors from non-research universities are more sensitive to the recession when making the graduate school decision.

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