How Do Early Social Interactions Shape a Woman’s Labor Supply?

Different people earn very different wages, but for what reasons? The question of what causes differences in labor market outcomes, specifically for women, is not a simple one. In fact, many variables contribute to such differences and researchers have established that gender identity is one of them.

A recent National Bureau of Economic Research working paper by Claudia Olivetti, Eleonora Patacchini, and Yves Zenou, entitled “Mothers, Friends and Gender Identity,” attempts to explore the importance of early social interactions in shaping gender identity and work choices of women later in their lives.

Taking a psychological approach, the authors cite three possible mechanisms through which early social interactions may affect women’s wages. First, parents may reinforce gender-appropriate behavior through their parenting activities. Second, children possibly learn from the behavior of their same-sex parents and imitate them. Third, children might also learn gender-appropriate behavior through observing and imitating the behavior of other adults. The authors want to test the validity of the last two mechanisms by looking at data on the behavior of the women’s parents and the behavior of their friends’ mothers, to whom they were exposed frequently as children.

The authors use data from the National Longitudinal Survey of Adolescent Health. They use a network model specification, where a number of women are divided into networks, and their social connections are reflected within each network. The researchers use the ordinary least squares method to regress the subjects’ weekly hours worked on the hours of work of mothers and friends’ mothers, controlling for a set of variables such as subjects’ race, GPA, mothers’ level of education, etc. The researchers examine two points: How do the subjects’ own mothers’ work hours affect their work hour decisions, and secondly, how do the hours of work of their friends’ mothers’ affect their work hour decisions?

In both cases, the variables of interest are positively correlated to the subjects’ own work hours. A one-hour increase in the mothers’ working hours is related to a marginal effect of 0.03, about an 8-percent increase in subjects’ average weekly hours worked. A one-hour increase in the working hours of friends’ mothers is related to a 0.022 marginal effect, about a 6-percent increase in their average hours worked.

Another significant finding is that the more a mother works, the lower the impact of friends’ mothers on a woman’s own work behavior. This implies that the impacts of the mothers’ work behavior and those of other adults may not be mutually reinforcing. One set of impact is a substitution for the other. Lastly, the researchers find that a mother’s role model effect is strongest for college-educated women .

The significant impacts of early social interaction on women’s labor supply and their gender identity prompt certain policy implications. How do we expose young girls to role models, both inside and outside of the family? Will school mentoring programs be useful in this respect? Moving forward, it will be interesting to explore fathers’ role model effects on men’s and women’s earnings. Moreover, as this study restricts its scope to work hours as the main outcome of interest, future research can expand to include women’s choices of occupations and women’s choices of fields of study as additional outcomes of interest.

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