Ge Sun is a BIG Lab doctoral student affiliate on the job market this year. With research interests in labor and macroeconomics, Ge’s paper Expected Fertility, Labor Market Contracts, and the Gender Wage Gap focuses on labor market contracts and the gender wage gap. Using China’s 2013 selective relaxation of the One-Child Policy as a natural experiment, she carried out a difference-in-differences design to examine the impact that expected future fertility had on labor contract wages. Given that the reform created no change in actual short term births, she was able to compare how expectations shaped employers perceptions of female productivity and the resulting penalty. She found that women’s wages declined 15% after the change.
Ge integrated a household time-allocation model with a wage-posting search model, tying household childcare labor with effort and human capital growth and allowing wages to be driven by expectations of future effort, which explained 80% of the post-reform gender wage gap expansion. Her work underscores the shortcomings of “Position-preserving” policies, which lengthen job tenure and strengthen employers’ incentives to price wages based on expected future productivity, which can be offset by employers by preemptive wage markdowns applied to all women. More information about Ge and her job market paper can be found on her website.