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Unemployment higher for men than women who grow up poor

January 29, 2016

By May Wong

It is widely known that a gender gap exists in the workforce: men generally earn more than women, and men are more likely to be employed than women.

But a new study led by Raj Chetty, a Stanford economist and senior fellow at the Stanford Institute for Economic Policy Research, and Harvard economist Nathan Hendren, has uncovered a group where that traditional gender gap is flipped – boys who grow up in poor families are, on average, less likely to be employed than girls from poor families.

Perhaps more importantly, the study – which analyzed the anonymous tax records of some 10 million American children born in the 1980s and tracked them to their employment status at age 30 – is the first to show that childhood environments play an important role in shaping gender employment gaps.

Among its key findings: boys from families in the bottom quintile of the income distribution had lower employment rates than girls of the same group, and especially so when boys were raised by single parents.

But researchers also found that geography particularly matters for low-income boys. The location where a child grew up more strongly affected the employment rate of low-income boys than it did for low-income girls, the study showed.

For instance, boys who grow up in Charlotte, N.C., with parents in the lowest income bracket are 12 percentage points less likely to land jobs than girls, according to the study. That gender gap narrows to 3 percentage points if the boys grow up in New York City.

Yet girls within the same income group have similar employment rates no matter where they grow up. The same holds true for boys from higher-income households: their employment rates are similar whether they grow up in Charlotte or New York.

“Girls seem more resilient to changes in their environment,” Chetty said. “It’s poor boys who seem highly sensitive to the environment in which they grow up, in terms of how well off their parents were and what type of neighborhood they grew up in.”

The study’s findings add to a growing body of evidence that “boys who grow up in poor urban ghettos have much worse outcomes on average than girls who grow up in the same environment,” he said.

The findings are in a new National Bureau of Economic Research working paper that Chetty and Hendren co-authored with Frina Lin, a predoctoral fellow at Stanford Institute for Economic Policy Research. Jeremy Majerovitz and Benjamin Scuderi, both of Harvard, also co-authored the paper.

The study builds on earlier landmark research on economic mobility that Chetty and Hendren had conducted when Chetty was a professor at Harvard and launched The Equality of Opportunity Project. Chetty, a MacArthur Fellow, joined Stanford’s Department of Economics last fall.

His previous studies found that different counties and cities clearly had different rates of upward mobility, and suggested that the environment in which a child grew up – including family income levels, a neighborhood’s racial makeup, a concentration of poverty – affected the prospects of the person’s earnings later in life.

For this latest study, the scholars set out to see if childhood environments affected boys or girls differently. Specifically, they examined whether the circumstances of a child’s upbringing led to a long-term impact on gender gaps in adult employment.

Apparently, they do. And the study suggests that boys from poor families appear to be most vulnerable.

Drilling deeper, the study analyzed the gender gap against a slate of environmental characteristics that were already shown in earlier studies to play a role in future outcomes – including measures of racial and income segregation, and family structure.

The detailed examination showed that single-parent households accounted largely for the “reversal” pattern in the gender gap found among low-income boys.

In addition, there is “robust evidence” that boys who grow up poor in highly segregated neighborhoods of concentrated poverty have significantly lower employment rates than girls who grow up in the same environment, the study stated.

Though the study found that poor boys on average fared worse in employment rates than poor girls, results varied from city to city. Certain regions yielded large reversals in gender gap differences while the employment rate was either similar or higher for poor boys than girls in other places.

Consider the children from the bottom income quintile from two cities at the opposite ends of the gender gap spectrum. On one end, the employment rate for the men who grew up poor in Salt Lake City, Utah, was 79 percent compared to 69 percent for women. In contrast, the employment rate was 62 percent for men who grew up poor in Richmond, VA, and 78 percent for women.

“The average pattern we’re finding (among low-income families) is actually masking a lot of variation across different places in the U.S.,” Chetty said.

The new study begs many questions. Why are poor boys more susceptible to negative childhood effects than poor girls? Why are the results so varied across different cities, even when places like Charlotte or New York City might share similar minority populations?

“There’s something about these neighborhoods that leads to these outcomes,” Chetty said. “There’s a lot of evidence, not just from this paper but from other studies as well, that suggests that boys in particular are very vulnerable. When they are in a negative environment, they’re more likely to go on a downward trajectory – more likely to misbehave in school and not do as well on tests, more likely to drop out of high school, and more likely to get involved in crime.”

Chetty hopes future research will shed more light on the underlying causes.

Still, the study – a comprehensive economic analysis – is a step toward understanding some of the factors, said Lin.

“This starts to paint a picture of what is associated with this gap,” she said.

Chetty did not initially anticipate including gender gaps as he embarked on a mission to research income mobility and inequality. “But we took the angle that solutions might vary by gender, and that we should keep gender equity in mind while we think about economic inequality more broadly.”

As it turns out, honing in on gender proved beneficial.

While other employment gap studies have focused instead on concurrent factors such as discrimination, occupational preferences or fertility patterns, the new findings “demonstrate that gender gaps in adulthood have roots in childhood, perhaps because childhood disadvantage is especially harmful for boys,” the study stated.

What’s more, Chetty’s research introduces a possible explanation for the broader trend of a steady decline in employment among men. Others have usually attributed the puzzling trend to globalization, an aging population, or changes in industry and technology.

“Our findings suggest that part of the explanation may instead lie in the growth of residential segregation, income inequality and the fraction of children raised in single-parent households – all factors associated with lower employment rates for boys relative to girls,” the study stated.

“If that’s what’s going on,” Chetty said, “then the policy changes we should be thinking about to address issues of lower employment rates among men are very different than how we deal with globalization and trade.”

May Wong is a freelance writer.