June 24, 2021
Women Faster to Accept Jobs. Pay Suffers
Women attend college at higher rates than men. Women’s labor force participation was also fairly steady prior to COVID, while men’s declined, and women continue to move into fields traditionally held by men.
Despite all this progress, women still earn much less than men.
Discrimination partly explains the pay gap, as does motherhood, which can interrupt the smooth progression in women’s careers at a critical time. But another explanation doesn’t get as much attention: women earn less because they’re not as confident as men about how much they can get and are more afraid of taking some risks in negotiations with employers.
In the 2018 and 2019 graduating classes at Boston University’s Questrom School of Business, women started their job searches earlier and accepted employers’ offers more quickly, according to a new analysis of student surveys before graduation and after they’d landed a job.
Men, on the other hand, do take risks, extending the negotiation with employers to see how much they can secure or even rejecting a job in hopes that a better one comes along.
Prior to graduating, nearly two-thirds of the women in BU’s business school had accepted a job during their junior or senior years but only about half of the men had, the researchers found.
The male students also enter their pay negotiations with higher expectations of what they want to earn. Their optimism, verging on overconfidence, serves them well. Male graduates from the BU business school earned about $6,700 more, on average, than their female classmates.
Men’s natural advantages in two psychological attributes – optimism and a willingness to take risks – “play a non-trivial role in generating early career earnings gaps among the highly skilled,” the study concluded. …
March 11, 2021
Retirement Ages Geared to Life Expectancy
For most of the 20th century, life expectancy was on the rise. Yet older Americans were retiring at younger and younger ages. That changed in the 1990s. Life expectancy continued to rise, but retirement ages started increasing too.
Many significant developments are behind the dramatic shift in retirement habits, including the decline of private-sector pensions, changing attitudes about working women, and bigger financial incentives from Social Security for people who remain in the labor force in order to get a larger monthly check when they finally retire.
Given all of these changes, Urban Institute researchers wondered whether the dramatic longevity gains experienced by the people who make it to their 50s and 60s could be counted as another reason for the delayed retirement trend.
Their evidence suggests that growing lifespans are keeping men over age 55 in the labor force longer and postponing their retirement, particularly in areas with strong job markets and more opportunity.
But women’s behavior was much more nuanced. Their labor force participation also increased, but only for women under 65 and to a much smaller extent than men. For the oldest women in the study – ages 65 to 74 – the results were puzzling to the researchers because labor force participation actually declined with life expectancy for those in the bottom half of the income distribution. …Learn More
March 21, 2019
Men Who Work Longer, Live Longer
In 2007, the majority of workers in The Netherlands were retiring by their early sixties to take advantage of the country’s generous pension scheme. Then came a sweeping 2009 policy that rewarded older workers with a tax break if they remained employed and active.
In a new study, researchers used this tax break – the Doorwerkbonus, or continued work bonus – to ask the question: do people who worked longer in response to this policy also live longer? The short answer is “no” for women but “yes” for men. Delaying retirement increased men’s lifespans by three months, compared with a group that was not eligible for the bonus, possibly because working longer improved their health.
The tax break was the equivalent of a wage increase for all older workers in every sector of the Dutch economy. The bonus started as a 5 percent tax cut for working people in the year they turned 62, increased to 7 percent at 63, and 10 percent at 64. After that, the rewards from work dwindled, falling to 1 percent for everyone over 67. (In 2013, the size of the tax break was reduced.)
Prior to the new study, other researchers had examined whether earlier retirements caused people to die younger. But Alice Zulkarnain and Matthew Rutledge at the Center for Retirement Research took the opposite tack. They asked: were the Dutch living longer because they delayed retirement after the Doorwerkbonus went into effect?
While the policy did increase men’s life spans slightly, women seemed unaffected, because fewer of them responded to it by working longer.
Is there a lesson in the Doorwerkbonus for American boomers? This study indicates that working longer will not only put more money in retirees’ pockets, it might also add to their life spans. …Learn More
Originally posted at https://squaredawayblog.bc.edu/tag/men/