Deutsche Forschungsgemeinschaft

Gender-Specific Job Search and Wage Formation

Christian Merkl

Project Description: Even contemporary labor markets show extensive differences between women and men. Women continue to earn on average less than men, even within narrowly defined occupations and sectors. In addition, female and male unemployment typically reacts differently over the business cycle. Although many of these facts are well documented, a large part of the existing literature refers to stocks (e.g., gender-specific employment and unemployment) or outcome variables (e.g., wages). Our project plans to intertwine the insights from the search and matching literature, which considers the labor market as a flow concept. To find a job, workers have to participate in the labor market, choose their search intensity and to decide at which firms to apply. To the extent that these decisions differ across gender, they may be at the root of gender inequalities. We plan to combine search theoretical modelling with two large microeconomic datasets to open up the black box of gender-specific search decisions. First, we want to use the firm-sided IAB-Job Vacancy Survey to analyze at which firms women and men apply. We will put particular emphasis on the role of firm wage premia and the ensuing flexibility requirements by firms. In addition, we want to use differences between East and West Germany (e.g., different day care usage or different firm structures or the role of children) to understand the driving sources for gender differences. Second, we plan to use the household-sided PASS-survey to understand better which factors drive male and female labor force participation, how men and women change their search activity over the business cycle and which implications for their employment probabilities can be derived from this behavior. Our microeconomic data will be considered through the lens of macroeconomic search and matching model to derive hypotheses and testable implications. Alternatively, empirical results will be used for calibration of macroeconomic models. These models can be used for counterfactual simulations and for the analysis of policy interventions that go beyond pure empirical results.