Brothers vs. Sisters: The effect of the gender composition on an individual's labor market performance
- This study examines how the gender of adult siblings affects the wages of workers, and whether this effect is consistent with the parents' country of birth.
- The study finds that in certain population groups, the gender composition of the household where the worker grew up has a marked potential effect on his wages.
- A female environment in childhood (more older sisters than older brothers) is beneficial for future wages, mainly among women whose parents were born in North America or Europe, particularly those who grew up in a residential area with high socioeconomic standing, and among men whose parents were born in North America or Europe and who grew up in residential areas with medium-to-low socioeconomic standing.
- Men and women whose parents came from Europe or North America and who have two older sisters earn a wage about 7 percent higher than those whose parents come from the same background but who have two older brothers.
- The gender composition of older siblings was not found to have any stable effect on adults whose parents come from Asia or North Africa or whose parents come from different regions.
- An examination of such variables may help identify barriers to the maximization of human capital in the economy, and lead to the formulation of appropriate methods of intervention.
A study carried out by Dr. Yuval Mazar and Uri Zilber of the Bank of Israel Research Department examines, for the first time in Israel, the extent to which the gender composition of siblings in a family influences their performance in the labor market. In particular, this work compares men and women with older brothers to men and women with older sisters.
The study joins the economic discussion of the nature vs. nurture issue by examining the extent of the effect on wages of inborn characteristics and qualities connected with gender, in contrast with environmental effects. This study's contribution to the literature is in its finding that the effect on wages of the households gender composition during childhood differs significantly between various population groups. Understanding the pass-through of this finding, and interpreting it, require further study.
The study focused on the non-ultra-Orthodox Jewish population, since fertility patterns in the ultra-Orthodox community an in Arab society differ markedly from the rest of the population, particularly during the sample periods. In addition, in order to optimally adjust the effect of sibling gender on the individual's achievements, the study relates its benchmark estimation to individuals with adult siblings of the same gender, meaning two older brothers or two older sisters. A further examination compares all combinations of gender structures in families.
By analyzing a decade's worth of data on non-ultra-Orthodox Jews (born between 1975 and 1985) who were born last in a family after two brothers or two sisters, the study found that among men and women whose parents were born in North America or Europe, the wages (at ages 28–37) of those born after two sisters were 7 percent higher than those born after two brothers (see the figures below), after taking the effects of other variables that might influence wages into account. Most of the effect found for women was among women with high socioeconomic standing (women who lived during their childhood in localities in socioeconomic clusters 16–20), and for men from low-to-medium socioeconomic standing (men who lived during their children in localities in socioeconomic clusters 1–15). For women and men whose parents were born in Asia or North Africa, or who came from mixed families, the study did not find robust results. An examination of the impact of the family's gender composition on interim variables that may have an effect on wages—such as education volume, psychometric scores, and/or eligibility for a matriculation certificate—found no strong connection between the variables that could explain the wage gaps.
The study's findings show that in certain population groups, the gender composition of the household where the worker grew up has a significant potential effect on the worker's wages. A more in-depth understanding of this phenomenon and of the mechanisms leading to it—particularly whether it reflects a choice by the individuals or household effects that have an impact (possibly unconscious) on future earnings potential and the maximization of their human capital—can contribute to the development of early intervention mechanisms that will enable those individuals to improve their earnings potential in adulthood. Even if parental descent becomes less important over the years, due to the increase in the rate of families in Israel where the parents come from different regions (as well as the fact that today, about half of Jews born in Israel are born to a father born in Israel), the insight that household structure has a significant effect on the children's future results in the labor market indicates that examining such variables may help identify barriers to the maximization of human capital in the economy, and lead to the formulation of appropriate methods of intervention.