Chi Man Yip
- "Les is More? Civil Partnership, Statistical Discrimination, and Lesbian Wage Premium" (with Raymond Sin-Kwok Wong, HKUST)
Abstract: The existence of a lesbian wage premium has been a puzzling discovery in economics literature. Despite the incorporation of observed characteristics such as human capital endowment, occupational female density, employment mode, firm size, and marital status into the wage model, such premium nevertheless persists. Building on a simple search model, this paper offers an alternative understanding by postulating that expected fertility has strong and negative influences on the wages of heterosexual female workers but no wage effect on lesbian workers. Since sexual orientation and expected fertility are negatively correlated, an omission of the latter would lead to model underspecification, creating an upward bias and the so-called lesbian wage premium. Using data compiled from the 2006-2010 UK Labour Force Survey (LFS), we provide unequivocal evidence that once the expected fertility has been properly controlled, the lesbian wage premium not only disappears but becomes a penalty instead. Wage decomposition exercise reveals that expected fertility accounts for almost half the premium. Finally, sub-group analyses further illustrate that only ''married'' lesbians experience substantial wage penalty whereas discrimination against cohabiting lesbians is negligible.
- "Gender-Oriented Statistical Discrimination Theory: Empirical Evidence from the Hong Kong Labor Market" (with Raymond Sin-Kwok Wong, HKUST)
Abstract: This paper proposes a simple search model to shed light on the role of aggregate fertility as a form of statistical discrimination against working women in the labor market. Our proposed theory assumes that workers generate identical production value that does not differ by gender. When matched with a firm, the worker and the firm bargain over the wage rates. Since pregnant female workers receive wages during maternity leave and generate no production value, a matched pair with a female worker may generate lower expected profit to the firm. Rent-sharing ensures a male worker to be paid more than a female worker even with the absence of overt discrimination, thus resulting in statistical discrimination against female workers. Using the 5% random subsamples of Hong Kong census and by-census in 1996, 2001, and 2006, the study provides unequivocal evidence that age-specific fertility rates exert negative impact on female wages, after controlling for other observable characteristics. More importantly, the negative effects of fertility on women's earnings are notably greater in female dominated occupations whereas similarly situated men are unaffected. Since fertility rates tend to be increasing with age during the early stage of women's work career, our theory explains why the gender gap tends to rise with age. One important implication from our model is that employers would similarly expect lesbian workers to have lower fertility than their heterosexual counterparts and thereby resolves the puzzle of the existence of the lesbian earnings premium found in the economic literature.