Equal but Inequitable: Who Benefits from Gender-Neutral Tenure Clock Stopping Policies with Kelly Bedard

In many highly educated professions, we see a pattern in which the number of female workers drops off over time, as does the share of women in the top earners cohort. Many of these professional tracks have an “up-or-out” quality, like making partner at a law firm or earning tenure at a university. This phenomenon is consistent with women entering lower-income fields or leaving them altogether: what mechanism might explain this effect, and what other implications might this pattern have? The final WAPPP seminar of the semester featured Kelly Bedard, Department Chair and Professor of Economics at the University of California, Santa Barbara, describing the results of a study on tenure clock-stopping policies in major university economics departments.

Over the last few decades, many universities have instituted “clock-stopping policies” for tenure. If a young academic has a child before receiving tenure, they may have an extra year before their tenure evaluation – rather than the usual six years to tenure, a new parent could have seven years of work evaluated, with their tenure clock stopped for one year.  Having children is a productivity shock that, though these policies, is taken into account in gauging lifetime productivity.

These clock-stopping policies come in two-flavors: in early iterations, only women were eligible for clock-stopping; more recent policies are gender neutral, such that anyone who has a child can stop their clock. Some universities started with a female-only policy and then switched to gender-neutral. Professor Bedard’s research asks: what are the distributional consequences of these policies? How might these policies change the way people think about publishing and fertility strategies?

The simple story would be to consider two individuals, Person A and Person B, going up for tenure. Person A, a woman, has a child, stops her clock, and does no research for a year. Person B, a man, has a child, stops his clock, but does not change anything about his productivity during that year. Under a gender-neutral clock-stopping policy, Person A was not hurt in her tenure evaluation—her productivity was the same in the other years, even with a year of no research. This is precisely what the policy was designed to do, to ensure that faculty who take parental leave are not harmed in their tenure evaluations by their decision to do so. Person B, however, benefited from the policy, with an additional year to write papers that might factor into his tenure decision. Other faculty who did not have children and did not stop their clocks would be just as unaffected as Person A. This benefit to Person B, while the policy is net neutral for everyone else, is something of an odd result – this is not what the policy was designed to do.

If tenure decisions are imperfect – that is, not made strictly on the basis of the six-year timeline, excluding any time in which the clock was stopped – Person B is now pushing up the bar for tenure with his additional year of productivity. Person B will still be able to achieve tenure, but Person A and anyone who has not had a child will have a more difficult time getting over that threshold. This gender-neutral clock-stopping policy therefore has the possibility for some odd distributional consequences, which may be compounded by the additional productivity costs of being pregnant or departmental variation in teaching relief or other parental leave policies.

In addition to tenure decisions, these policies may also affect publishing decisions. Economists tend to focus on the top five journals, which each have a long lag in time to publication. These journals have a low likelihood of acceptance, but a high return if one’s article is published. Lower-ranked journals have a higher likelihood, but a lower return. Clock stopping adds an additional time period to this publishing game – with only one time period, a researcher might decide to send a manuscript to a lower-ranked journal for the added likelihood of publication. Without a top-five journal article, they may not receive tenure at their current institution, but likely will somewhere else. With two time periods, faculty are incentivized to send manuscripts first to the top-ranked journals; if the manuscript is rejected, it could always be sent to a lower-ranked journal in the second time period. If this strategy works, there will be obvious gains to those who stop their clocks versus those who don’t.

There are multiple avenues through which this effect could be occurring: clock-stopping could change an individual’s number of papers and where they are published and could affect tenure decisions and ultimately fertility decisions, which themselves may have publishing or productivity effects.

To test these possibilities, Professor Bedard assembled two unique datasets, one of the clock-stopping policies for each of the top 50 economics departments, as well as an exhaustive list of all assistant professors from 1980-2010. Using course catalogs, online CVs, and LinkedIn, she assembled a dataset of 1600 assistant professors who started their careers at a top 50 economics department who published at least two papers in eight years, along with their complete job histories and publication records.

The first considered metric was probability that an individual would get tenure at the school at which they started their career. In general, tenuring rates are fairly flat for both men and women, though the average rates are higher for men. What happens with the introduction of clock-stopping policies? Accounting for a series of controls, including flexible gender-specific time dummies and gender-specific university fixed effects, female-only clock-stopping policies have almost no effect on tenuring rates. However, gender-neutral clock-stopping policies have an enormous effect: with a gender-neutral clock-stopping policy, male tenure rates rise by 18 percentage points, and female tenure rates fall by 19 percentage points.

What is the mechanism for this effect? Fortunately, these clock-stopping policies do not impact the likelihood of getting tenure somewhere; instead, women seem to be moving and getting tenure at schools other than where they start. Using the complete job histories, Professor Bedard suggests that, conditional on getting tenure somewhere, once clock-stopping policies enter into place, fewer female faculty move to lower-ranked departments. While there is very little upward movement, this means that female faculty are more likely to move laterally, receiving tenure at a school ranked similarly to the one at which they started.

What are the effects of these policies on publishing? Over the first seven years of their careers, 40-50% of female faculty are not publishing in the top five journals, and those that do publish on average one article. Male faculty are somewhat more likely to publish in the top five journals, but still not to a significant degree. Comparing schools with clock-stopping policies (of either flavor) versus those without, over time female faculty at schools with clock-stopping experience, on average, a drop in publishing. By contrast, men experience a consistent increase in publishing success, such that men have, on average, half a publication more in a top 5 journal. Given that most people only publish one article in a top five journal, clock-stopping has a big effect for men with major impacts for publishing success.

The first version of Professor Bedard’s paper did not contain any analysis on fertility, but so many people wanted to know that she added an additional section. One major difficulty of studying effects on fertility is acquiring the data: most of the collected data is administrative, and few faculty report whether they have children on their CVs. Instead, Professor Bedard sent emails to each of the faculty members for which she had emails – around 85-90% of the dataset – asking whether the individual had children and, if so, in what year the children were born. The response rate (around 65%) was surprisingly high, but of course was entirely non-random; those who had left the profession were unlikely to respond, while those at higher-ranked schools were far more likely to respond. At schools with a gender-neutral clock-stopping policy, about 56% of pre-tenure faculty have a child, compared to 46% of those without a gender-neutral clock-stopping policy. Based on these data, it appears that clock-stopping does not change total fertility, but may change the timing of fertility.

These results for tenure, publishing, and fertility illuminate the side effects of clock-stopping policies and how they might eliminate burdens for women but confer additional benefits on men.

Can Financial Incentives Reduce the Baby Gap? Evidence from a Reform in Maternity Leave Benefits with Anna Raute

As women’s educational attainment and labor market participation have increased, so too have concerns about decreasing birth rates and below-replacement fertility levels. All OECD countries other than the US provide paid parental leave in order to reduce the cost of childbearing. However, the structure of parental benefits may affect different groups in different ways. This week’s WAPPP seminar featured Anna Raute, WAPPP Fellow and Assistant Professor in Economics at the University of Mannheim, as she presented her research on the effects of the 2007 German parental leave reform.

Highly educated and high-earning women tend to have fewer children than lower-educated and lower-earning women, leading to what researchers have called a “baby gap” between these two groups. For highly-paid women, having children is associated with a greater opportunity cost than for women who are less well paid. In Germany, this manifests in a stark difference in number of children born to highly-educated versus lesser-educated women, as well as a large gap in the percentage of childless women. Close to one-third of highly educated women in Germany never have a child, compared to 18% of lower-educated women (here meaning women who have completed a high school degree but no vocational training or tertiary education). However, in other countries with family policies, such as Sweden, this gap in childlessness or number of children is not quite so stark. The structure of family policies may affect these figures.

Prior to the 2007 reform, parents received a fixed sum of 7,200 euros per child. However, after the reform, parental benefits were linked to the mother’s pre-birth earnings. Rather than the flat payment, mothers could receive between 67-100% of their pre-birth earnings, up to 21,000 euros per child. Prior to the reform, lower-earning mothers were getting a much greater relative benefit from parental benefits than their higher-earning peers. By contrast, with the new reform, higher-earning women stood to benefit much more from wage replacement than from the flat payment, which may have decreased their perceived opportunity cost of having a child.

The key question, Professor Raute asks, is whether fertility post-reform exhibited differential changes across the income and education distribution. Much of the prior literature on parental benefits focuses on cash transfers and welfare programs that provide greater incentives for lower-income mothers than higher-income mothers. This study provides a critical window to examine whether high-earning and highly-educated women are less elastic, or whether they too react to financial incentives in terms of their fertility.

Nine months after the implementation of the law, there was a statistically significant increase in the average monthly birth rate per thousand mothers, as well as a small drop in the number of abortions. In addition, the rate of IVF between 2006 and 2011 increased by 33%. The increase in fertility nine months after the law’s implementation translates to an additional 2,300 children born per year.

Using German pension data, Professor Raute examined this increase in terms of income and education level. This birth data reveals that medium- and high-earners benefitted substantially from the new reform. While benefits for lower-earning mothers did not change substantially pre- and post-reform, medium-earning mothers received an additional 4,000 euros, on average, and high-earning mothers received an additional 8,000 euros. If the difference in these benefits affects fertility, we should expect to see a relative increase in fertility for women who are benefitting greatly from the reform versus those who are not benefitting as much.

For women who are below the median income, there is not a statistically significant change in the probability of having a child. By contrast, for women who earn above the median income, fertility increases for each income bracket. Overall, each additional 5,000 euros in expected benefits raises the probability of having a child in a given year by 6%.

Professor Raute observes the same effect when examining education. Post-reform, the average probability of having a child increases by 6% for medium-educated women and by 13% for highly-educated women.

Given the recency of the reform and the lag in available data, these are only short-term effects. Professor Raute examined women at the end of their fertility cycle in an effort to understand whether we might see a permanent effect on fertility and for which groups. Indeed, for women at the end of their fertility cycle, each additional thousand euros in benefits increases mean fertility level from pre-reform levels by 5.1%. This strong effect indicates that we might expect to see a permanent effect of the reform on completed fertility.

In addition, there is a significant increase in fertility for women ages 40-45. This effect seems to be driven by women who already have one child and decide that – now that it’s cheaper – they will have a second, as opposed to childless women deciding to have their first child due to the effects of the reform. Highly-educated women are also having their first children 4.8 months earlier, on average, which is correlated with a greater number of children overall.

Overall, these findings provide strong support for a discontinuous increase in overall fertility as a result of the reform, resulting in strong effects on fertility for women with higher earnings and educational attainment. The observed baby gap between highly-educated and lesser-educated women therefore seems to be narrowing.

Interestingly, the 2007 reform also increased paternity acknowledgement, in which unmarried fathers can opt to legally register as the child’s father, with all of the attached rights and obligations. In Germany, paternity acknowledgement is strongly associated with better outcomes for children.

Professor Raute hypothesizes two possible explanations for why the 2007 reform increased parental acknowledgement. It could be that as benefits to mothers increase, fathers have to contribute less to support the household, and therefore paternal acknowledgement is cheaper (the “cost channel”). Alternatively, the reform reserved two months of paid leave for fathers, which may have encouraged paternity acknowledgement (the “paternity leave channel”).

Looking at children born in the first few months of the reform, whose parents couldn’t have known about the new reform when they were conceived, paternity acknowledgement increased by 1.5 percentage points. However, this effect was driven primarily by women who were working prior to giving birth, who were entitled to a larger share of benefits under the reform. This effect implies that the cost channel, rather than the paternity leave channel, is responsible for the increase in paternity acknowledgement post-reform.