Socially-embedded investments: Explaining gender differences in job-specific skills

Abstract

Gender-differences in post-schooling skill investments play a central role in stratification processes. Yet little research has been devoted to explaining how these differences come about. This paperhelps to fill this gap by proposing and testing a job-investment model with social-interaction effects that melds substantive ideas of sociology and economics. Firms use strategic compensation profiles in order to protect their job-specific skill investments and this shifts the weight of the investment decision to the supply side. Employees consider the tenure-reward profiles of different job-specific investment options and chose rationally on the basis of their expected survival probabilities in each of them. Given uncertainty, actors are likely to inform their job-survival expectations by observing their social context. Three different forms of social influence are distinguished: social-learning,social norms and role identification. It is further argued that social influences on job-survival expectations can be identified empirically by blocking individuals\' work and family preferences. Several hypotheses are derived and tested to a subsample of approximately 2,700 young single wage-earners nested in 261 different European regions and 24 different European countries. Results show that young women\'s job-investment decisions are significantly correlated with 1) the social visibility of women in highly specialized jobs in the preceding generation; 2) the proportion of men who do housework in their potential marriage markets, and 3) the existing fertility norms.gender; job-specific investments; social interactions; strategic compensation; social learning; social norms; role identification; prefrences; european social survey