Attitudes Toward Economic Risk and Occupational Choice

• Author: Paul W. Miller,Anh T. Le,Nicholas G. Martin,Wendy S. Slutske
• Published date: 01 October 2014
• DOI: http://doi.org/10.1111/irel.12054
• Date: 01 October 2014

Attitudes Toward Economic Risk and

Occupational Choice

*

ANH T. LE, PAUL W. MILLER, WENDY S. SLUTSKE, and

NICHOLAS G. MARTIN

This paper examines the effects of attitudes toward economic risk on occupational

choice. Workers with a more favourable disposition toward economic risk have a

higher probability of being employed in the more prestigious, high-paying Profes-

sional and Administrative occupations. Potential biases associated with omitted

genetic and family background factors are considered. The marked differential in

attitudes toward economic risk between males and females, however, makes only

a minor contribution to the considerable occupational segregation on the basis of

gender in the contemporary Australian labor market.

Introduction

OCCUPATIONAL SEGREGATION ON THE BASIS OF GENDER APPEARS TO BE A FACT OF

life in all Western economies. In many countries it is seen as a major contribu-

tor to the gender pay gap (Macpherson and Hirsch 1995; Miller 1987), and as

a yardstick of economic and social disadvantage on the basis of gender.

1

A

good sense of the extent of this occupational segregation can be conveyed

using the Duncan and Duncan (1955) Index of Dissimilarity, which records

the percentage of women (or men) who would need to shift across occupations

for the male and female occupational distributions to be the same. In the

United States in 1990, for example, this index had a value of 50 (see Baunach

2002). Figures for European countries for this measure of segregation

*The authors’affiliations are, respectively, Curtin Business School, School of Economics and Finance,

Department of Economics, Perth, Australia. Email: A.Le@curtin.edu.au; School of Economics and Finance,

Curtin University, Perth, Australia. Email: Paul.Miller@curtin.edu.au; University of Missouri, Columbia,

Missouri. Email: slutskew@missouri.edu; and QIMR Berghofer, Royal Brisbane Hospital, Brisbane, Australia.

Email: Nick.Martin@qimrberghofer.edu.au.

1

Power (1975: 237) argues that “The elimination of occupational segregation by sex is essential if

women are to attain economic equality with men.”Reskin (1993; 265) notes that “segregation (can be

viewed as) a fundamental process of social inequality.”

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presented in Swanson (2005) range from 46 (Italy) to 60 (Finland). In this

regard, Australia is certainly no exception.

In Australia in 2006, almost 40 percent of women would have needed to

change major group occupations in order to achieve congruency with the occu-

pational distribution of males.

2

Three decades earlier, in 1976, the most com-

parable figure was 46 percent.

3

Over this thirty-year period, various pieces of

legislation were enacted that, a priori, would have been expected to have

allowed women to make inroads into men’s jobs. These include the Sex

Discrimination Act of 1984, the Affirmative Action (Equal Employment

Opportunity for Women) Act of 1986, and the updated version of this later

act, The Equal Opportunity for Women in the Workplace Act of 1999. These

legislative changes seem to have had only a minor effect.

4

This occupational segregation on the basis of gender has been the subject of

a number of studies in Australia. Included are Power (1975), Lewis (1982,

1985), McGavin (1983), Miller and Volker (1985), and Kidd and Meng

(1997). These studies have emphasized the extent of the differences between

the occupational distributions of men and women (Power 1975); the slow pace

of change in this regard (Lewis 1982; Power 1975)

5

; and the fact, which

appears to be unique to Australia, that this occupational segregation is not

detrimental to women’s relative rate of pay (Kidd and Meng 1997).

6

The more recent studies that have examined the gender differences in occu-

pational outcomes have generally used a model of occupational choice based

on Schmidt and Strauss (1975) and Brown, Moon and Zoloth (1980a, 1980b).

See, for example, Miller and Volker (1985) and Kidd and Meng (1997). In

these models, occupational choice is depicted as depending on human capital

(schooling, labor market experience) and personal characteristics (age, marital

status). It has been shown that differences between males and females in these

explanatory variables can explain a sizeable part of the gender differences in

occupational distributions. For example, Miller and Volker (1985: 207) report

2

The index for Australia is computed using fewer occupational categories than in Baunach (2002) or

Swanson (2005). Hence cross-country comparisons are not strictly valid.

3

Over the intervening period (1971–2001), the official occupational classification was altered several

times, and there is no cross-walk available. This means that the comparison offered here will be only a

guide to changes (or lack thereof) over time.

4

Indeed, Lewis’s (1982) models, estimated using data for 1891–1976, predict a fall in the Index of Dis-

similarity of just over one percent over the three decades. Hence, the various legislative changes could have

had up to a five-percentage-point effect.

5

While Lewis (1982) draws attention to occupational segregation on the basis of gender declining, his

estimating equation reveals that the rate of decrease is slowing over time.

6

This observation seems to have been first made by Jones (1983). It arises because women in Australia

are under-represented in the lowest-paying occupations to a greater extent than they are under-represented in

the highest-paying occupations.

Attitudes Towards Ecomic Risk / 569