Audrey Light

Early-Career Work Experience and Gender Wage Differentials

We estimate a wage model that includes an array of variables measuring the fraction of time worked during each year of the career. This array fully characterizes past employment experience, regardless of how sporadic it has been. Our model yields substantially higher estimated returns to experience and lower returns to tenure than do models that measure experience cumulatively and use the standard quadratic functional form. We find that the data reject the standard model but fail to reject our model. Furthermore, we find that 12% of the male-female wage gap is due to differences in the timing of work experience.

In-School Work Experience and the Returns to Schooling

Students often accumulate substantial work experience before leaving school. Because conventional earnings functions do not control for in‐school work experience, their estimates of the return to schooling include the benefit of work experience gained along the way. Using data from the National Longitudinal Survey of Youth, I estimate wage models with and without controls for in‐school work experience. The estimated schooling coefficients are 25%–44% higher (depending on how I control for ability bias) when in‐school work experience is omitted than when it is included. These findings indicate that conventional models significantly overstate the wage effects of “school only.”

Job Change Patterns and the Wages of Young Men

This study uses data from the National Longitudinal Survey of Youth to distinguish empirically between moverstayer, search good, and experience good models of job mobility. We estimate wage models in which the pattern of overall job mobility affects both the level and tenure slope of the log-wage path. After controlling for the correlation between mobility patterns and time-constant person- and job-specific unobservables, we find that workers who undergo persistent mobility have lower log-wage paths than less mobile workers. This finding is consistent with models in which job mobility is driven by time-varying unobservables, such as experience good models, where changes in perceived match quality cause turnover.

Why Parents Play Favorites: Explanations for Unequal Bequests

Economists have invested a great deal of effort in trying to understand the motivation for family transfers, yet recent empirical work testing the seemingly appealing models of altruism and exchange has led to decidedly mixed results. A major stumbling block has been the lack of adequate data. We take a fresh look at the issue using responses to an innovative survey question that directly asks mother about the planned division of their estates. We find that both altruism and exchange are frequently offered as explanations of behavior and are of nearly equal importance. Furthermore, the explanations are consistent with observable characteristics of the mother, lending support to the validity of the question. We also find that among step or adopted families, genetic ties play an important role. Because motivating factors appear to differ across families the lack of a consensus among previous researchers about motives ought not to be surprising.

Gender differences in the marriage and cohabitation income premium

Using data from the 1979 National Longitudinal Survey of Youth, I identify causal effects of marriage and cohabitation on total family income. My goals are to compare men’s and women’s changes in financial status upon entering unions and to assess the relative contributions of adjustments in own income, income pooling, and changes in family size. Changes in own income that are due to intrahousehold specialization prove to be minor for both men and women relative to the effects of adding another adult’s income to the family total. Women gain roughly 55% in needs-adjusted, total family income, regardless of whether they cohabit or marry, whereas men’s needs-adjusted income levels remain unchanged when men make these same transitions.

Hazard model estimates of the decision to reenroll in school

Abstract In a sample of males drawn from the National Longitudinal Survey of Youth, one-third of the individuals who first leave school between 1978 and 1990 are found to return to school before 1991. In light of this finding, the current study extends the analysis of schooling demand to a dynamic framework in order to consider the timing of the enrollment decision. A semiparametric, proportional hazard model for nonenrollment durations is estimated. The hazard model estimates are consistent with the view that young men reenroll in school when the costs are relatively low and/or the benefits are relatively high. For example, increases in state-wide average tuition levels and current earned wages lower the hazard rate, while increases in unemployment rates have the opposite effect.

High School Employment, High School Curriculum, and Post-School Wages.

Abstract The direct, skill-enhancing effect of high school employment is difficult to identify because high school work effort is correlated with curricular choices, postsecondary schooling and work effort, and many other observed and unobserved factors. This study uses data for male, high school graduates to estimate a wage model in which detailed measures of high school coursework and post-school work experience are included among the extensive array of covariates. Instrumental variable methods are used to contend with the correlation between high school employment and unobserved characteristics. The direct effect of high school employment on subsequent wages proves to be small and relatively short-lived. Young men who work in high school gain additional, “indirect” wage benefits by taking vocational courses and gaining above-average work experience after graduation.

From Bakke to Hopwood: Does Race Affect College Attendance and Completion?

In light of recent, state-level actions banning racial preference in college admissions decisions, we investigate how whites and minorities differ in their college-going behavior. Using data from the National Longitudinal Survey of Youth, we estimate a sequential model of college attendance and graduation decisions that allows correlations among the errors. Our estimates reveal that minorities are more likely than observationally equivalent whites to attend colleges of all quality levels. Being a minority has a positive effect on graduation probabilities, but, overall, minorities are less likely than their white counterparts to complete college because they possess fewer favorable unobserved factors.

Who Receives the College Wage Premium? Assessing the Labor Market Returns to Degrees and College Transfer Patterns

Using data from the 1979 National Longitudinal Survey of Youth, we estimate wage models in which college-educated workers are classified according to their degree attainment, college type, and college transfer status. The detailed taxonomy produces modest improvements in explanatory power relative to standard specifications, and reveals considerable heterogeneity in the predicted wages of college-educated workers. We find that transfer students receive an “indirect” wage benefit insofar as changing colleges allows them to earn a degree. Some transfer students receive an additional “direct” wage benefit, presumably because switching schools increases their skill investment opportunities.

Divorce as Risky Behavior

Given that divorce often represents a high-stakes income gamble, we ask how individual levels of risk tolerance affect the decision to divorce. We extend the orthodox divorce model by assuming that individuals are risk averse, that marriage is risky, and that divorce is even riskier. The model predicts that conditional on the expected gains to marriage and divorce, the probability of divorce increases with relative risk tolerance because risk averse individuals require compensation for the additional risk that is inherent in divorce. To implement the model empirically, we use data for first-married women and men from the 1979 National Longitudinal Survey of Youth to estimate a probit model of divorce in which a measure of risk tolerance is among the covariates. The estimates reveal that a 1-point increase in risk tolerance raises the predicted probability of divorce by 4.3% for a representative man and by 11.4% for a representative woman. These findings are consistent with the notion that divorce entails a greater income gamble for women than for men.