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Approval of equal rights and gender differences in well-being

Abstract

Women earn less than men but are not less satisfied with life. This paper explores whether norms regarding the appropriate pay for women compared to men may explain these findings. We find that the gender wage gap is smaller where a larger fraction of the citizenry has voted in favor of equal pay. We also find that employed women are less (not more) satisfied with life in liberal communities where the gender wage gap is smaller. These findings suggest that norms regarding the appropriate relative pay of women compared to men are shaping gender differences in well-being.

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Notes

  1. See, e.g., Blau and Kahn (2000), Stanley and Jarrell (1998), and Weichselbaumer and Winter-Ebmer (2005).

  2. See, e.g., Clark (1997) and Sousa-Poza and Sousa-Poza (2000).

  3. Crosby (1982) calls the same phenomenon the “paradox of the contented female worker” and refers to relative deprivation theory to explain it. Related research is, e.g., discussed in Phelan (1994).

  4. Norms about women’s and men’s role on the labor market do not only affect the outcomes of salary negotiations but also decisions about promotion (for related work on glass ceiling, see, e.g., Albrecht et al. 2003) and advanced training or shared expectations about appropriate effort on the job.

  5. It was understood at the time that primarily, the private sector would be affected by this vote. The public sector had been covered by the ILO equal rights agreement no. 100 that the Swiss government had ratified in 1972 and by a federal law passed in 1977. The amendment did not directly invalidate all contracts between employers and workers that stipulated different pay for equal work. Instead, each contract had to be reviewed separately by the court in order to determine violation of the constitution (Neue Zürcher Zeitung, July 30, 1981).

  6. Headline of an article in the newspaper Blick, June 3, 1981.

  7. Headline of an article in the newspaper Luzerner Neuste Nachrichten, June 4, 1981.

  8. A constitutional amendment has to be accepted by both the majority of people and the majority of cantons.

  9. In reaction to the vote, the Swiss employer’s association printed a booklet to be distributed to its members containing, among other things, the reasons for unequal pay between women and men. “There is scientific proof that women are 30% [note that this figure coincides exactly with the gender wage differential at that time] less productive than men. This finding is based on studies that study the oxygen intake capacity of male and female subjects.”

  10. It would, of course, also be possible to develop an argument why women who voted “no” followed their material self-interest (instrumental voting). Intra-household bargaining theory, e.g., suggests that a woman not working in the labor market is more concerned with the impact of the referendum on her husband’s salary than her own potential salary in the future. To the extent that the amendment leads to overall wage pressure, she would find it in her material self-interest to vote against equal pay. However, the motives for approval or disapproval stated in the survey conducted immediately after the vote do not align with considerations following from intra-household bargaining theory.

  11. Note that it is not possible to rely on different votes to find an equally convincing proxy for the social pay norm. Possible candidates for different votes include the national referendums on extending suffrage to women held in 1959 (rejection) and 1971 (approval). These referendums capture more generally than the present popular initiative the notion of political equality between men and women. As an attractive alternative, surveys tend to focus more directly on values. However, it is usually not possible to rely on them to measure the norms that prevail within communities, as there are not a sufficient number of observations for any communities other than a few big cities.

  12. Note that the information about shared local norms is news only for us as statisticians. However, these norms have been prevalent and at work in these communities for years. What we observe in outcomes with regard to the gender wage gap (Section 4) and the gender subjective well-being gap (Section 5) is not the response to the referendum, i.e., it is not a reaction to the referendum in terms of an information revelation to fellow citizens.

  13. Jann (2003) applies the same technique as used in the work by Jasso and Webster cited in Section 2.1.

  14. Previous research shows that the ratio of the earnings of women relative to men is lowest in Switzerland in comparison with the USA and six other OECD countries (Blau and Kahn 1992). The unexplained component of the wage differential is especially high for workers with low education (Bonjour and Gerfin 2001). Flückiger and Ramirez (2000) analyze the changes in the wage structure between men and women from 1994 to 1996.

  15. The hourly wage rate is calculated by dividing annual earnings by annual hours. We use a Gaussian kernel with default bandwidth in kernreg1.ado for STATA. The “blip” in wages for women and men at 80% voting in favor for equal rights is due to low density of observations at 80% and under-smoothing produced by the default bandwidth.

  16. We use the inverse of the sampling probability as weights because some waves of the SLFS tend to oversample specific areas of Switzerland. Weighting effectively ensures that the results are representative at the national level.

  17. This result is conditional on potential regional differences in schooling, work experience, and tenure.

  18. Differences in prices across communities do not invalidate this conclusion, since prices are identical for women and men across communities.

  19. Results not shown in the text are available on request from the authors.

  20. Ransom and Oaxaca (2005) calculate based on gender differences in the elasticity of separations with respect to the wage earned in the current job that the elasticities of labor supply to the firm are about 3.5 for men and about 2.7 for women.

  21. A second argument in favor of contrasting rural areas with cities rests on the presumption that the fraction of jobs that is tailored entirely to men or women is higher in rural areas than in cities.

  22. The fact that the interaction term “female × approval of equal rights” is larger for cities than for relatively small communities may indicate that place of work and place of residence coincides to a larger extent in the former than in the latter. Moreover, expressed norms in 1981 may be a less accurate proxy for norms to today in small communities due to differences in migration.

  23. The minimum age for voting at the national level was 20 in 1981.

  24. Alternatively, it is likely that individuals, who were relatively old in 1981, are more likely to still be living in the same community than younger individuals. Thus, the voting proxy for the social norms regarding the position of women on the labor market may be better for older cohorts than for younger cohorts. This sample split also allows assessing whether reverse causality is biasing the results. Young women’s attitudes are not measured in the voting proxy of the social norm. For young women, the norm measure therefore reflects the norms of the neighborhood that they have been exposed to.

  25. Note that these results focus on services because the type of work performed by women and men across service industries is more homogenous than across all industries. Results for the remaining 32,365 observations are similar to the results for the private sector services industries (not shown).

  26. On October 12, 1977, the Swiss federal court ruled that female teachers in the canton of Neuchâtel have to be granted the same salary scale as their male colleagues.

  27. The fact that women are, on average, paid less than men in the public sector suggests that unmeasured productive characteristics are important. Unfortunately, it is not possible to address the concern with unmeasured productive characteristics with information on regional mobility because mobility is endogenous. However, note that sorting of unproductive (relative to women) men into liberal areas (or vice versa) is at odds with the evidence in Table 3. We find that there is no correlation of the gender wage gap with voting in industries where appropriate pay norms are unimportant in affecting pay policies, i.e., public sector service industries. This suggests that gender differences in unobserved productivity are unlikely to explain the fact that gender wage gaps are smaller in liberal areas compared to conservative areas.

  28. In a previous study, the role of the social norm to live by one’s own earnings in unemployed people’s life satisfaction has been analyzed. It has been found that the stronger the social norm to work, the less satisfied unemployed people are with their life (Stutzer and Lalive 2004).

  29. Instead, we would observe what Kahneman (2000) called a “satisfaction treadmill”: people report constant well-being even though their “true” individual welfare increases with a higher material living standard (here, a lower gender wage gap). However, if in more liberal communities women’s aspirations increase, their “improved” circumstances need not to translate into higher “true” individual welfare as women experience a “hedonic treadmill effect.” However, we do not think that differences in the response frame hide working women’s suffering due to discrimination in more traditional communities, as we see consistent patterns of evidence across four measures.

  30. This can be understood as procedural disutility (see Frey et al. 2004 for the concept of procedural utility) that affects women’s well-being beyond narrow economic outcomes such as wages.

  31. In a study of 5,000 British workers, Clark and Oswald (1996) formed the reference income as the average income of persons with the same labor market characteristics. They conclude that the higher the income of the reference group, the less satisfied people are with their job.

  32. According to the reasoning in the previous section, there are further variables that can be considered endogenous to the norm like education and other household members’ income. If these variables are excluded, still a negative partial correlation for the interaction term is estimated (not shown).

  33. Estimation results including the partial correlation between unemployment and life satisfaction are based on an extended sample of the SHP and can be obtained from the authors on request.

  34. Our results are in line with existing research on the relationship between gender wage gaps and perceived discrimination. Specifically, several authors find that those women reporting the most gender discrimination face, in fact, the least statistical discrimination (Kuhn 1987; Barbezat and Hughes 1990; Antecol and Kuhn 2000).

  35. Another test of the gender identity hypothesis based on data on reported subjective well-being is by Booth and van Ours (2008). They relate intra-family patterns in working hours to spouses’ life satisfaction.

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Acknowledgements

We are grateful to two anonymous referees, George Akerlof, Bruno S. Frey, Ed Glaeser, Lorenz Götte, Andreas Kuhn, Audrey Light, Simon Lüchinger, Stephan Meier, Tuomas Pekkarinen, Dina Pomeranz, Betsey Stevenson, Josef Zweimüller, and participants at the 1st International Panel User Conference in Switzerland, EALE, the IZA Workshop on “The Nature of Discrimination”, the Annual Meeting of the German Economic Association, the Annual Meeting of the American Economic Association, the Annual Congress of the Swiss Society of Economics and Statistics, the Annual Meeting of the European Public Choice Society, and the research seminar at the University of Würzburg for helpful comments and to Andreas Herzog for the use of mapresso. This study has been realized using the data collected by the Swiss Household-Panel, a project financed by the Swiss National Science Foundation Program, SPP, “Switzerland Towards the Future” (grant no. 5004-53205).

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Correspondence to Rafael Lalive.

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Responsible editor: James Albrecht

Appendix

Appendix

Table 6 Approval of equal rights and wages, Switzerland 1999–2003, dependent variable: log (hourly wage rate)
Table 7 Approval of equal rights and life satisfaction, Switzerland 2000–2001, dependent variable: satisfaction with life

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Lalive, R., Stutzer, A. Approval of equal rights and gender differences in well-being. J Popul Econ 23, 933–962 (2010). https://doi.org/10.1007/s00148-009-0257-4

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Keywords

  • Gender discrimination
  • Gender wage gap
  • Subjective well-being

JEL Classification

  • I31
  • J70
  • Z13