Staff Reports
Preference for the Workplace, Investment in Human Capital, and Gender
March 2016 Number 767
Revised March 2017
JEL classification: J16, J24

Authors: Matthew Wiswall and Basit Zafar

We use a hypothetical choice methodology to estimate preferences for workplace attributes and quantify how much these preferences influence pre-labor-market human capital investments. This method robustly identifies preferences for various job attributes, free from omitted variable bias and free from considering the equilibrium job match. Women on average have a higher willingness to pay (WTP) for jobs with greater work flexibility and job stability, and men have a higher WTP for jobs with higher earnings growth. These job preferences relate to college major choices and actual job choices, and explain as much as 25 percent of the gender wage gap.

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