Wednesday, August 02, 2006

In case you missed it ...

A rash of "bizarre" papers have hit the blogoshere today, so in case you missed them ...

1) Tony V points us to a new NBER working paper by Christopher S. Ruebeck, Joseph E. Harrington, Jr. and Robert Moffitt that finds that college-educated, left-handed men earn 15% more (score!). I really should have worked harder on this when I toyed around with the same data and idea 3 years ago.
We examine whether handedness is related to performance in the labor market and, in particular, earnings. We find a significant wage effect for left-handed men with high levels of education. This positive wage effect is strongest among those who have lower than average earnings relative to those of similar high education. This effect is not found among women.
2) Tyler Cowen links to another new NBER working paper by Andrea Ichino, Enrico Moretti(that I was too chicken to discuss when I read it last week) that argues that absenteeism related to menstrual cycles explain 12% of the gender gap in earnings:
In most Western countries illness-related absenteeism is higher among female workers than among male workers. Using the personnel dataset of a large Italian bank, we show that the probability of an absence due to illness increases for females, relative to males, approximately 28 days after a previous illness. This difference disappears for workers age 45 or older. We interpret this as evidence that the menstrual cycle raises female absenteeism. Absences with a 28-day cycle explain a significant fraction of the male-female absenteeism gap. To investigate the effect of absenteeism on earnings, we use a simple signaling model in which employers cannot directly observe workers' productivity, and therefore use observable characteristics -- including absenteeism -- to set wages. Since men are absent from work because of health and shirking reasons, while women face an additional exogenous source of health shocks due to menstruation, the signal extraction based on absenteeism is more informative about shirking for males than for females. Consistent with the predictions of the model, we find that the relationship between earnings and absenteeism is more negative for males than for females. Furthermore, this difference declines with seniority, as employers learn more about their workers' true productivity. Finally, we calculate the earnings cost for women associated with menstruation. We find that higher absenteeism induced by the 28-day cycle explains 11.8 percent of the earnings gender differential.

3) He also links to a related paper which finds that menstration also affects female behavior in lab experiments:

We find systematic evidence that demographic characteristics, especially gender, race and the number of siblings, education backgrounds, as well as menstrual cycle, significantly affect bidder behavior in the first and second-price sealed-bid auction in the laboratory. In particular, we find that women bid significantly higher than men in the first-price auction, while the likelihood of dominant strategy play in the secondprice auction is not different between men and women. This finding provides support for the hypothesis that risk attitude rather than cognitive ability is the main driving force for the gender gap in competitive environments. At a biological level, we find that, in the first-price auction, during menstruation, when levels of estrogen and progesterone are the lowest, women do not bid differently from men. The gender difference in the first-price auction is driven by women during other phases of the menstrual cycle with higher levels of estrogen and progesterone.

4) Stephen Dubner links to some wild evolutionary biology research using the National Longitudinal Survey of Adolescent Health which finds that individuals rated more attractive by their interviewers are 36% more likely to have girl for their first child.

According to this news article, "Selection pressure means when parents have traits they can pass on that are better for boys than for girls, they are more likely to have boys. Such traits include large size, strength and aggression, which might help a man compete for mates. On the other hand, parents with heritable traits that are more advantageous to girls are more likely to have daughters."

Beauty is apparently just one "female" trait. Kanazawa has done previous research suggesting that nurses, social workers and kindergarten teachers -- those with "empathic" traits -- also had more daughters than sons. Meanwhile, he found that scientists, mathematicians and engineers are more likely to have sons than daughters.

5) (not new research, but interesting nonetheless) Kevin Drum wonders if cost of living adjustments are responsible for the disconnect between productivity growth and wages (he essentially argues that norms and expectations regarding wage increases changed, left unsaid is that this leave the CEOs to claim the residual -- given that I've not found a satisfactory explanation for the disconnect between productivity growth and wage growth for the bottom 90% of the wage distribution, I throw it out there for consideration):
As everyone knows, median wages (adjusted for inflation) increased steadily from the end of World War II through the 60s. Then, in the mid-70s, they suddenly stagnated. Depending on who and how you measure things, median wages have either gone up slightly, stayed flat, or gone down slightly since then. But whichever measure you use, wages haven't come anywhere close to keeping up with economic growth over the past 30 years.

Why? Lots of reasons (though many of them, like globalization, have been considerably overstated), but here's one the might have contributed: the widespread acceptance of COLAs (cost of living adjustments) that took hold during the inflationary 70s. During that decade it became increasingly common to view wage increases as a response to inflation and to institutionalize COLAs as a way of dealing with this.

But the end effect was that eventually COLAs became a ceiling for wage increases, not a floor, and workers increasingly began to see that as fair. They were happy as long as they were "keeping up."

But of course, "keeping up" is literally all it is. A COLA increase is nothing more than a way of keeping your wages exactly the same. So for the past 30 years, workers have been getting COLA increases and thinking that's fair, without fully realizing that in the past workers used to get real increases. Back in the 50s and 60s, as the economy grew everyone got richer.

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