Job Flexibility and Household Labor Supply: Understanding Gender Gaps and the Child Wage Penalty

This dissertation investigates how occupational flexibility affects married couples\u27 labor supply and the gender pay gap around childbirth. Using the NLSY79 data and Goldin\u27s (2014) measure of occupational flexibility, I show that flexibility is a significant determinant of married couples\u27 labor supply adjustments. When a husband\u27s job exhibits low flexibility, couples are more likely to specialize with the wife dropping out of the labor market and the husband increasing hours worked. In contrast, couples with greater flexibility show less labor supply adjustment to childbirth. To analyze the relationship between occupational flexibility and family-friendly labor market policies, I develop and estimate a dynamic discrete choice model of couples\u27 decision-making about labor supply and occupations. In the model, occupations are characterized by wage-hours schedules and flexibility levels. I find that increasing women\u27s and men\u27s own occupational flexibility increases labor force participation by 4 percentage points in the childbirth year. Interestingly, increasing husband\u27s flexibility has a greater impact on the wife\u27s labor adjustment than her own flexibility, augmenting her participation rate and working hours by 10 and 7 percentage points. Finally, I evaluate the effects of family-friendly policies providing temporary flexibility for couples experiencing a birth in the last two years. Policies that target women increase female labor supply and reduce the gender pay gap by 8% in the long run. However, when the benefits are offered to both spouses, the positive effects on the wife\u27s labor supply are weakened, and the gender pay gap expands in the long run