![]() This paper studies the relation between the wage and amenity components of firm compensation under collective bargaining. An equal pay policy counterfactual shows that requiring firms to pay men and women the same wage closes the wage gap by 15% on average, but has unintended consequences as employers adjust on the hiring margin. A gender quota at top jobs improves women’s representation in high-productivity positions, but firms undo this policy by exerting more wage discrimination. Counterfactual simulations show that shifting two parental leave months from women to men shrinks the wage gap by 13%. Both hiring discrimination and preference for amenities draw women to low-productivity jobs in early career, and slow down their career progression in the long run. Estimating the model on administrative employer-employee data combined with occupational level survey data on amenities from Finland, I find that a large proportion (44%) of the gender wage gap in early career is attributed to employers’ statistical discrimination based on fertility concerns, whereas gender differences in labor force attachment explain the majority of the gap (70%) in late career. Capacity-constrained firms anticipate these gender differences when setting wages and making match decisions. In the model, men and women differ in turnover behaviors, parental leave lengths, and preference for amenities before and after having children. This paper develops an equilibrium search model to study the mechanisms underlying the lifecycle gender wage gap: human capital accumulation, preference for job amenities, and employers’ statistical discrimination in wage offers and hiring. ![]() ![]() Further, we find that observables like age and experience have limited predictive power over preference heterogeneity. We find that there is meaningful horizontal differentiation of firms: allowing heterogeneity in worker preferences – a small number of discrete preference classes, each associated with a separate ranking of firms – describes choices far better than requiring all workers to share a single common component of utility at each firm: in other words, there are multiple job ladders. In order to understand the nature of firm wage setting on the platform, we follow Backus, Conlon, and Sinkinson (2021) to test between models of firm conduct. Relative to standard estimation strategies, our revealed-preference estimators avoid the incidental parameters problem induced by including fixed effects to control for unobserved heterogeneity in outside options and costs. Building on Ho and Pakes (2014) and Sorkin (2018), we develop estimators of preferences and markdowns with two-sided heterogeneity that rely only on basic revealed preference relations for workers and firms. We use novel data on the option sets and choices of job-seekers and recruiting firms to provide new estimates of workers’ preferences over nonwage amenities and firms’ wage markdowns in a high-wage labor market. Applying this adjustment, our model further predicts that the trends in the composition of labor demand in the US over the past three decades may have decreased intergenerational persistence, while also leading to higher growth in the welfare of the average worker. ![]() When earnings are adjusted to reflect this additional compensation, we find substantially larger persistence of income from parents to children. Estimating the model allows us to infer the size of compensation each worker receives from their choice of occupation. We rationalize this fact when we introduce occupational choice with preferences over the intrinsic qualities of occupations into a standard theory of intergenerational mobility. Using the PSID and NLSY data, we document that children of richer US parents are more likely to select into occupations that rank higher in terms of this index. Based on responses in the General Social Survey (GSS), we construct an index that aggregates positive qualities such as respect, learning, and work hazards, controlling for respondent income and tenure. If the average worker attributes distinct values to the intrinsic qualities of different occupations, benefitting from those values constitutes part of one’s labor compensation.
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