Working Paper: NBER ID: w25739
Authors: jeffrey t denning; brian jacob; lars lefgren; christian vom lehn
Abstract: We document two empirical phenomena. First, the observational wage returns to hours worked within occupation is small, and even negative in some specifications. Second, the wage return to average hours worked across occupations is large. We develop a conceptual framework that reconciles these facts, where the key insight is that workers choose jobs as a bundle of compensation and expected hours worked. As an example, we apply this framework to the gender wage gap and show how it can explain the view expressed in recent work that hours differences between men and women represent a large and growing component of the gender wage gap.
Keywords: gender wage gap; hours worked; occupational wages
JEL Codes: J16; J3; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 10% increase in hours worked within occupations (J29) | 1.1% decrease in hourly wages (J31) |
| 10% increase in average hours worked at the occupation level (J29) | 20.3% increase in average wages (J39) |
| gender differences in hours priced using the average hours framework (J31) | residual gender wage gap decreases significantly (J79) |
| relationship between hours worked and wages (J38) | influenced by job type and expectations (J29) |
| increasing returns to hours worked over time (J29) | exacerbate the gender wage gap (J79) |