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Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective

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  • Stephan Humpert
  • Christian Pfeifer

Abstract

This paper takes a labor supply perspective (neoclassical labor supply, job search) to explain the lower employment rates of older workers and women. The basic rationale is that workers choose non-employed if their reservation wages are larger than the offered wages. Whereas the offered wages depend on workers' productivity and firms' decisions, reservation wages are largely determined by workers' endowments and preferences for leisure. To shed some empirical light on this issue, we use German survey data to analyze age and gender differences in reservation and entry wages, preferred and actual working hours, and satisfaction with leisure and work.

Suggested Citation

  • Stephan Humpert & Christian Pfeifer, 2012. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," SOEPpapers on Multidisciplinary Panel Data Research 449, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp449
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    Cited by:

    1. Pfeifer, Christian & Wagner, Joachim, 2014. "Is innovative firm behavior correlated with age and gender composition of the workforce? : evidence from a new type of data for German enterprises," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 47(3), pages 223-231.
    2. Caliendo, Marco & Lee, Wang-Sheng & Mahlstedt, Robert, 2017. "The gender wage gap and the role of reservation wages: New evidence for unemployed workers," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 161-173.
    3. Nivorozhkin, Anton & Promberger, Markus, 2020. "Employment Subsidies for Long-Term Welfare Benefits Recipients: Reconciling Programmes Goals with Needs of Diverging Population Groups," IAB-Discussion Paper 202027, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Christian Pfeifer & Joachim Wagner, 2012. "Age and gender composition of the workforce, productivity and profits: Evidence from a new type of data for German enterprises," Working Paper Series in Economics 232, University of Lüneburg, Institute of Economics.
    5. Hila Axelrad & Israel Luski & Miki Malul, 2017. "Reservation Wages and the Unemployment of Older Workers," Journal of Labor Research, Springer, vol. 38(2), pages 206-227, June.
    6. Julia Bock-Schappelwein & Andrea Egger & Felix Kranner & Gabriele Schmied, 2022. "Integration von Frauen auf dem niederösterreichischen Arbeitsmarkt," WIFO Studies, WIFO, number 69835, August.
    7. Stephan Humpert & Christian Pfeifer, 2013. "Explaining age and gender differences in employment rates: a labor supply-side perspective [Eine Erklärung alters- und geschlechtsspezifischer Unterschiede in den Beschäftigungsquoten: Die Sicht de," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(1), pages 1-17, March.
    8. Heger, Dörte & Korfhage, Thorben, 2020. "Short- and Medium-Term Effects of Informal Eldercare on Labor Market Outcomes," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Latest Ar, pages 1-23.
    9. Christian Pfeifer & Joachim Wagner, 2014. "Age and gender effects of workforce composition on productivity and profits: Evidence from a new type of data for German enterprises," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(1), March.
    10. Stephan Humpert, 2012. "Age and Gender Differences in Job Opportunities," Working Paper Series in Economics 235, University of Lüneburg, Institute of Economics.

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    More about this item

    Keywords

    Age; family gap; gender; job search; labor supply; reservation wages;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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