Essays in Empirical Labour Economics : Family Background, Gender and Earnings

Abstract: All three essays in this thesis are concerned with the interrelation of family, gender and labour market outcomes. The first paper investigates family earnings mobility between parents and sons, and parents and daughters, highlighting the role of assortative mating. The results suggest that daughters are more mobile than sons. I also find that Sweden has a higher degree of mobility compared to the U.S., and that assortative mating is an important underlying channel for earnings transmission. The difference in mobility between the two countries does not inherently depend on factors affecting the marriage match. Moreover, adult economic outcomes are more dependent on family background for those at the lower end of the earnings distribution. The second study analyses the long-run effects of an increase in family size on the 1980-2005 labour market outcomes of Swedish men and women. The decision to have (more) children is dependent on current and future labour market prospects. I use the exogenous variations in the sex composition of the first two children to overcome this endogeneity problem. My findings suggest that having an additional child has a stronger negative impact on earnings than on participation. However, mothers experience a substantial but not complete long-term recovery in earnings. The third paper illustrates the difficulty in disentangling the underlying channels of intergenerational earnings persistence using a path analysis model. On closer examination, such a model has a potential shortcoming since the covariates are correlated to other unobserved factors. The results suggest that education is the most influential mechanism in the earnings transmission process, while IQ, mental ability and BMI are of secondary importance. However, education is sensitive to the inclusion of other covariates and the order in which these are entered into the equation.