Gender Gaps in Labor Informality: The Motherhood Effect

Recent work has quantified the large negative effects of motherhood on female labor market outcomes in Europe and the US. But these results may not apply to developing countries, where labor markets work differently and informality is widespread. In less developed countries, informal jobs, which typically include microenterprises and self-employment, offer more time flexibility but poorer social protection and lower labor earnings. These characteristics affect the availability of key inputs in the technology to raise children, and therefore may affect the interplay between parenthood and labor market outcomes. Through an event-study approach we estimate short and long-run labor market impacts of children in Chile, an OECD developing country with a relatively large informal sector. We find that the birth of the first child has strong and long lasting effects on labor market outcomes of Chilean mothers, while fathers remain unaffected. Becoming a mother implies a sharp decline in mothers' labor supply, both in the extensive and intensive margins, and in hourly wages. We also show that motherhood affects the occupational structure of employed mothers, as the share of jobs in the informal sector increases remarkably. In order to quantify what the motherhood effect would have been in the absence of an informal labor market, we build a quantitative model economy, that includes an informal sector which offers more flexible working hours at the expense of lower wages and weaker social protection, and a technology to produce child quality that combines time, material resources and the quality of social protection services. We perform a counterfactual experiment that indicates that the existence of the informal sector in Chile helps to reduce the drop in LFP after motherhood in about 35%. We conclude that mothers find in the informal sector the flexibility to cope with both family and labor responsibilities, although at the cost of resigning contributory social protection and reducing their labor market prospects.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Gender Gaps in Labor Informality: The Motherhood Effect

Recent work has quantified the large negative effects of motherhood on female labor market outcomes in Europe and the US. But these results may not apply to developing countries, where labor markets work differently and informality is widespread. In less developed countries, informal jobs, which typically include microenterprises and self-employment, offer more time flexibility but poorer social protection and lower labor earnings. These characteristics affect the availability of key inputs in the technology to raise children, and therefore may affect the interplay between parenthood and labor market outcomes. Through an event-study approach we estimate short and long-run labor market impacts of children in Chile, an OECD developing country with a relatively large informal sector. We find that the birth of the first child has strong and long lasting effects on labor market outcomes of Chilean mothers, while fathers remain unaffected. Becoming a mother implies a sharp decline in mothers' labor supply, both in the extensive and intensive margins, and in hourly wages. We also show that motherhood affects the occupational structure of employed mothers, as the share of jobs in the informal sector increases remarkably. In order to quantify what the motherhood effect would have been in the absence of an informal labor market, we build a quantitative model economy, that includes an informal sector which offers more flexible working hours at the expense of lower wages and weaker social protection, and a technology to produce child quality that combines time, material resources and the quality of social protection services. We perform a counterfactual experiment that indicates that the existence of the informal sector in Chile helps to reduce the drop in LFP after motherhood in about 35%. We conclude that mothers find in the informal sector the flexibility to cope with both family and labor responsibilities, although at the cost of resigning contributory social protection and reducing their labor market prospects.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Essays on public policy and human capital

Esta tesis doctoral consta de tres capítulos que tratan diferentes aspectos a través de los cuales la política pública puede afectar las decisiones de las personas acerca de invertir en su capital humano. El primer capítulo analiza los efectos de una llegada masiva de inmigrantes en los patrones de elección de escuela en España. El segundo capítulo se enfoca en entender cómo la familia y la escuela pueden interactuar en la formación de hábitos saludables en el hogar. El tercer capítulo estudia los efectos de la economía informal sobre las decisiones ocupacionales y de inversión en capital humano de las personas. En el primer capítulo, "Sorting of Students by Cultural Traits: The Effects of Immigration", estudio los efectos de la llegada de grandes flujos inmigratorios a países desarrollados en la distribución de rasgos culturales (locales versus foráneos) de los niños en edad escolar, y analizo cómo estos cambios pueden impactar en la segregación escolar público-privada cuando los padres toman en consideración aspectos culturales al momento de elegir escuela para sus hijos. En muchos de estos países tanto la proporción de padres locales que envían sus niños a escuelas privadas como la proporción de padres inmigrantes que mandan sus niños a escuelas públicas aumentaron con el tamaño de la población inmigrante. España es un claro ejemplo de inmigración masiva y subsecuente huida de los padres españoles de las escuelas públicas. Basándome en la literatura previa sobre elección de escuela y sobre transmisión cultural, construyo y calibro un modelo de elección de escuela que puede dar cuenta de la segregación de estudiantes observada en España. El modelo incluye aspectos de equilibrio general en una economía con una única ciudad, muchos barrios, y con generaciones solapadas de individuos heterogéneos en dos dimensiones: ingreso y rasgos culturales. Al momento de elegir escuela, los padres toman en consideración el ingreso esperado para sus hijos en el futuro (el cual dependerá de la calidad educativa que reciban) así como también la identidad cultural que adquieran en las escuelas. Utilizo el modelo para estudiar el impacto de la inmigración sobre la segregación escolar y barrial, y para analizar distintas políticas que pueden afectar la asignación de estudiantes entre escuelas como también los resultados de integración cultural de los inmigrantes. Encuentro que tanto reducir los subsidios a la educación privada como incrementar el valor multi-cultural de la educación pueden contribuir a reducir la segregación de estudiantes entre escuelas públicas y privadas, al mismo tiempo que moderar la segregación barrial y mejorar los patrones de integración cultural y económica de los inmigrantes. El segundo capítulo, "Spillovers of Health Education at School on Parents' Physical Activity" (escrito en colaboración con Dolores de la Mata y Nieves Valdés) explota las reformas educativas sobre Educación para la Salud (ES) a nivel estadual en los Estados Unidos como un cuasi-experimento natural para estudiar el impacto causal de la ES que reciben los niños en la escuela sobre la actividad física que realizan sus padres. Usamos datos del Panel Study of Income Dynamics (PSID) para el período 1999-2005 unidos a los datos de las reformas estaduales en la curricula de ES obtenidos de la National Association of State Boards of Education (NASBE) Health Policy Database, y de los registros del School Health Policies and Programs Study (SHPPS) para los años 2000 y 2006. Para identificar los efectos derrame de interés utilizamos diferentes metodologías (DDD, CiC, y DD), en las cuales permitimos la existencia de tratamientos diferenciales. Encontramos un efecto positivo de las reformas de ES en la educación primaria sobre la probabilidad de que los padres hagan actividad física ligera. Implementar cambios sustanciales en la curricula de ES aumenta la probabilidad de que los padres comiencen a hacer actividad física en una magnitud que va entre los 6.3 y los 13.7 puntos porcentuales, mientras que la probabilidad promedio para las madres no parece ser afectada. Analizamos la existencia de varios impactos heterogéneos de las reformas de ES como una forma de esclarecer los mecanismos que motorizan el efecto derrame, y encontramos evidencia consistente con dos hipótesis: la especialización por género en la crianza de los hijos y el hecho de que los niños efectivamente transmiten la información que reciben en la escuela a sus padres. El ultimo capítulo, "Investing in Myself?: Informality, Occupational Choice and Investments in Human Capital", se enfoca en los efectos de la economía informal {muy presente en países en desarrollo -- sobre el emprendedurismo y el nivel educativo alcanzado por la población. La evidencia que compara datos entre países señala que estos fenómenos están conectados entre sí : primero, la tasa de emprendedurismo aumenta con el tamaño de la economía informal; segundo, la diferencia en el retorno a la educación superior que reciben emprendedores y trabajadores se hace más grande (favoreciendo más a los emprendedores) cuando el tamaño de la economía informal crece; tercero, en países con altos niveles de informalidad la fracción de individuos con alto nivel educativo que eligen convertirse en emprendedores es mayor que en países con sectores informales pequeños. Para explicar estos hechos estilizados, construyo un modelo con decisiones de inversión en capital humano, elección ocupacional y un sector informal, en el cual el capital humano no solo mejora la eficiencia del trabajo asalariado sino que también mejora las habilidades gerenciales de los emprendedores, y donde la tecnología para producir bienes se caracteriza por la complementariedad entre el capital y la cualificación de los trabajadores. En esta economía hay restricciones crediticias que aparecen como resultado de que las firmas informales pueden evadir impuestos y esconder el colateral de los intermediadores financieros, y de que hay un costo de hacer cumplir los contratos de crédito. El tamaño que toma el sector informal depende de cuán grandes sean estos costos de asegurar el cumplimiento de contratos, los cuales limitan el uso de capital físico en la economía y también afectan los retornos a la educación de manera diferencial entre ocupaciones. Las predicciones del modelo son capaces de dar cuenta de los tres hechos empíricos que motivan este trabajo y también son capaces de echar luz sobre los mecanismos que operan a medida que aumenta el tamaño de la economía informal. En particular, un mayor nivel de informalidad desincentiva las inversiones en capital humano que hacen los trabajadores, mientras incentiva estas inversiones en el caso de algunos emprendedores, mayormente informales pero habilidosos.This doctoral dissertation consists of three chapters dealing with different dimensions of the impacts of public policy on human capital investments. The first chapter analyzes the effects of massive immigration on the school choice patterns in Spain. The second chapter studies how families and schools can interact in the formation of healthy habits in the household. The third chapter deals with the effects of the informal economy on occupational and educational decisions. In the first chapter, "Sorting of Students by Cultural Traits: The Effects of Immigration", I analyze the effects of large immigration inows to developed countries in the distribution of cultural traits (native versus immigrant) of school-age children and I study the impacts of these changes on the segregation of students across public and private schools, when cultural considerations play a role in parents' school choices. In many of these countries both the proportion of native parents who chose to send their children to private schools as well as the proportion of immigrant parents who chose public institutions increased with immigration. Spain provides a clear example of large immigration and subsequent native-flight out from public schools. Building on previous literature on school sorting and cultural transmission I construct and calibrate a model of school choice that can account for the observed sorting of students in Spain. The model economy is a singlecommunity, multi-neighborhood general equilibrium model with overlapping generations of individuals who differ along two dimensions, income and cultural traits. Parents care about their children's future income and their acquired cultural identity. I use the model economy to study the impact of immigration on school and neighborhood segregation and to analyze policies that can affect the allocation of students across schools as well as the integration outcomes of immigrants. I find that reducing subsidies to private education as well as increasing its multi-cultural value can reduce the sorting of natives and immigrants across public and private institutions while ameliorating neighborhood segregation and improving cultural and economic integration outcomes of immigrants. The second chapter, "Spillovers of Health Education at School on Parents' Physical Activity" (joint with Dolores de la Mata and Nieves Vald es), exploits state Health Education (HED) reforms in the US as quasi-natural experiments to estimate the causal impact of HED received by children on their parents' physical activity. We use data from the Panel Study of Income Dynamics (PSID) for the period 1999-2005 merged with data on state HED reforms from the National Association of State Boards of Education (NASBE) Health Policy Database, and the 2000 and 2006 School Health Policies and Programs Study (SHPPS). To identify the spillover effects of HED requirements on parents' behavior we use several methodologies (DDD, CiC, and DD) in which we allow for different types of treatments. We find a positive effect of HED reforms at the elementary school on the probability of parents doing light physical activity. Introducing major changes in HED increases the probability of fathers engaging in physical activity by between 6.3 and 13.7 percentage points, while on average this probability for mothers does not seem to be affected. We analyze several heterogeneous impacts of the HED reforms in order to unveil the mechanisms behind these spillovers. We find evidence consistent with hypotheses such as gender specialization of parents in childcare activities, or information sharing between children and parents. The last chapter, "Investing in Myself?: Informality, Occupational Choice and Investments in Human Capital", focuses on the effect of informality -- which is pervasive in many developing countries -- on entrepreneurship and educational attainment. Cross country data shows that these phenomena are connected: First, the rate of entrepreneurship increases with the size of the informal economy; second, the difference between the skill premium for entrepreneurs and for workers becomes larger as the size of the informal economy increases; third, in countries with large informal sectors the fraction of highskilled individuals that choose to be entrepreneurs is larger than in countries with small informal sectors. To explain these facts, I develop a model economy with human capital investment, occupational choice and an informal sector, where the investment in human capital improves the efficiency of labor as well as managerial skills, and the technology to produce goods exhibits capital-skill complementarity. In the model economy, credit constraints and informal firms emerge as a result of the interplay between the ability of informal firms to avoid taxes on one hand and their ability to hide their collateral on the other. In this economy the size of the informal sector is associated with the enforceability of contracts, which by limiting the use of physical capital in the economy it also affects the relative returns to education across occupations. The model predictions are able to account for the three empirical facts, as well as to shed light on the mechanisms at work when the level of informality in the economy increases. In particular, a higher level of informality disincentivizes human capital investments for workers while it incentivizes these investments for the case of some managers, mostly informal but talented.Programa Oficial de Posgrado en EconomíaPresidente: Caterina Calsamiglia Costa; Secretario: Julio Cáceres Delpiano; Vocal: Manuel García Santan

Gender Gaps in Labor Informality: The Motherhood Effect

Recent work has quantified the large negative effects of motherhood on female labor market outcomes in Europe and the US. But these results may not apply to developing countries, where labor markets work differently and informality is widespread. In less developed countries, informal jobs, which typically include microenterprises and self-employment, offer more time flexibility but poorer social protection and lower labor earnings. These characteristics affect the availability of key inputs in the technology to raise children, and therefore may affect the interplay between parenthood and labor market outcomes. Through an event-study approach we estimate short and long-run labor market impacts of children in Chile, an OECD developing country with a relatively large informal sector. We find that the birth of the first child has strong and long lasting effects on labor market outcomes of Chilean mothers, while fathers remain unaffected. Becoming a mother implies a sharp decline in mothers' labor supply, both in the extensive and intensive margins, and in hourly wages. We also show that motherhood affects the occupational structure of employed mothers, as the share of jobs in the informal sector increases remarkably. In order to quantify what the motherhood effect would have been in the absence of an informal labor market, we build a quantitative model economy, that includes an informal sector which offers more flexible working hours at the expense of lower wages and weaker social protection, and a technology to produce child quality that combines time, material resources and the quality of social protection services. We perform a counterfactual experiment that indicates that the existence of the informal sector in Chile helps to reduce the drop in LFP after motherhood in about 35%. We conclude that mothers find in the informal sector the flexibility to cope with both family and labor responsibilities, although at the cost of resigning contributory social protection and reducing their labor market prospects.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Motherhood, labor market trajectories, and the allocation of talent: harmonized evidence on 29 countries

In this paper we assess whether changes in labor market decisions upon motherhood lead to potential inefficient allocations of talent. Using an event study approach with retrospective data drawn from SHARE for 29 European countries we show that motherhood effects go beyond the well studied effects of labor market participation decisions: the arrival of the first child substantially affects the uptaking of alternative modes of employment, such as part-time and self-employment, that are characterized by flexible or reduced work schedules but also lower pay on average. We also show that the size of labor market responses to motherhood are larger in societies with more conservative social-norms or with weak policies regarding work-life balance. To assess the effects of motherhood over the allocation of talent, we explore how labor market responses to parenthood vary by alternative measures of talent or ability. We find that all women, even those with the highest level of ability and abler than their husbands face large motherhood effects, while men show virtually no changes in the labor market when becoming fathers. We also find that mothers who become self-employed after the birth of the first child are those that are less entrepreneurial-able according to cognitive ability and personality traits shown to impair business survival. Overall, our results suggest relevant changes in the allocation of talent caused by gender differences in nonmarket responsibilities that can have sizable impacts on aggregate market productivity.Centro de Estudios Distributivos, Laborales y Sociale

Motherhood, labor market trajectories, and the allocation of talent: harmonized evidence on 29 countries

In this paper we assess whether changes in labor market decisions upon motherhood lead to potential inefficient allocations of talent. Using an event study approach with retrospective data drawn from SHARE for 29 European countries we show that motherhood effects go beyond the well studied effects of labor market participation decisions: the arrival of the first child substantially affects the uptaking of alternative modes of employment, such as part-time and self-employment, that are characterized by flexible or reduced work schedules but also lower pay on average. We also show that the size of labor market responses to motherhood are larger in societies with more conservative social-norms or with weak policies regarding work-life balance. To assess the effects of motherhood over the allocation of talent, we explore how labor market responses to parenthood vary by alternative measures of talent or ability. We find that all women, even those with the highest level of ability and abler than their husbands face large motherhood effects, while men show virtually no changes in the labor market when becoming fathers. We also find that mothers who become self-employed after the birth of the first child are those that are less entrepreneurial-able according to cognitive ability and personality traits shown to impair business survival. Overall, our results suggest relevant changes in the allocation of talent caused by gender differences in nonmarket responsibilities that can have sizable impacts on aggregate market productivity.Centro de Estudios Distributivos, Laborales y Sociale

Gender gaps in labor informality: The motherhood effect

We estimate the short- and long-run labor market impacts of parenthood in a developing country, Chile, based on an event-study approach around the birth of the first child. We find that becoming a mother implies a sharp decline in employment, working hours, and labor earnings, while fathers' outcomes remain unaffected. Importantly, the birth of the first child also produces a strong increase in labor informality among working mothers (38%). All these impacts are milder for highly educated women. We assess mechanisms behind these effects based on a model economy and find that: (i) informal jobs’ flexible working hours prevent some women from leaving the labor market upon motherhood, (ii) improving the quality of social protection of formal jobs tempers this increase in informality. Our results suggest that mothers find in informal jobs the flexibility needed for family-work balance, although it comes at the cost of deteriorating their labor market prospects.Fil: Berniell, María Inés. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Instituto de Investigaciones Económicas; ArgentinaFil: Berniell, Lucila. Banco de Desarrollo de América Latina; VenezuelaFil: De la Mata, Dolores. Banco de Desarrollo de América Latina; VenezuelaFil: Edo, María. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad de San Andrés; ArgentinaFil: Marchionni, Mariana. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Instituto de Investigaciones Económicas; Argentin

Motherhood and flexible jobs: Evidence from Latin American countries

We study the causal effects of motherhood on labour market outcomes in Latin America by adopting an event study approach around the birth of the first child based on panel data from national household surveys for Chile, Mexico, Peru, and Uruguay. We show that motherhood not only reduces women's employment but also implies changes in their occupational structure towards time-flexible, yet more vulnerable, forms of employment: part-time jobs, self-employment and informal work. Additionally, we provide suggestive evidence for 18 Latin American countries that gender norms and family policies shape the demand for flexibility that arises with the arrival of children. Countries that hold more conservative views regarding women's role within the family or with less generous family policies show larger gaps in labour market outcomes between mothers and childless women.Fil: Berniell, María Inés. Universidad Nacional de La Plata; ArgentinaFil: Berniell, Lucila. Universidad Nacional de La Plata; ArgentinaFil: de la Mata, Dolores. Universidad Nacional de La Plata; ArgentinaFil: Edo, María. Universidad de San Andrés; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Marchionni, Mariana. Universidad Nacional de La Plata; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentin

Motherhood and the Missing Women in the Labor Market

Motherhood currently stands out as a key determinant of the gender gap in labor market outcomes. Studies identifying the effect of children have mostly focused in Europe and the US. These results may not be extrapolated to developing countries with different institutional settings and cultural norms. In this paper we estimate the impact of becoming a mother on various labor outcomes in Chile. Following an event-study methodology we show that motherhood implies a drastic reduction in earnings, explained by a drop in labor supply, both in the extensive and intensive margins. These changes persist even ten years after the first child is born. No child penalties are found for fathers, neither in the short nor in the long run. The results for mothers are driven by a decline in formal employment, leading to an increase in informality rates among them. Finally, we find that effects are stronger for less educated mothers, indicating that education is a buffer for this type of child penalty. Our results suggest that mothers find in the informal sector the flexibility to cope with both family and labor responsibilities, although at the cost of resigning contributory social protection and reducing on-the-job skills accumulation.Facultad de Ciencias Económica

Motherhood, pregnancy or marriage effects?

The existence of large child penalties on women's labor market outcomes has been documented for multiple countries and time periods. In this paper, we assess the extent to which marriage decisions and pregnancies may partly explain these child penalties. Using data from 29 countries drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE), we show that although marriage has a negative effect on women's employment (3.3%), its magnitude is much smaller than that of the negative effect of a first child (23%). Moreover, we find that pregnancies that end in non-live births have non-statistically significant effects on employment in the following years, supporting the exogeneity assumption underlying the identification in child penalty studies. These new results lend support to the hypothesis that child-rearing, rather than marriage or pregnancy, is responsible for women exiting the labor force upon motherhood.Fil: Berniell, María Inés. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; ArgentinaFil: Berniell, Lucila. Development Bank Of Latin America; ArgentinaFil: Mata, María Dolores de la. Development Bank Of Latin America; ArgentinaFil: Edo, María. Universidad de San Andrés; ArgentinaFil: Fawaz, Yarine. Centro de Estudios Monetarios y Financieros; EspañaFil: Machado, Matilde. Universidad Carlos III. Departamento de Economía; EspañaFil: Marchionni, Mariana. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentin