Causal Effects of Early Career Sorting on Labor and Marriage Market Choices: A Foundation for Gender Disparities and Norms

Do early labor market experiences determine longer-run life and career outcomes, and do they operate differentially for males and females? We study this question in the context of the physician labor market by exploiting a randomized lottery that determines the sorting of Danish physicians into internships, where students with bad lottery numbers end up assigned to less desirable local labor markets and entry-level jobs. Using administrative data that span up to ten years after physicians’ graduations, we study key decisions that determine their longer-run life trajectories. We find causal effects of early-career labor market sorting on a range of life-cycle outcomes that cascade from longer-run labor market sorting, to human capital accumulation, to occupational choice, and even to fertility. Notably, we find that the persistent longer-run effects are entirely driven by females, whereas males experience only temporary career disruptions from unfavorable early-stage sorting. The gender divergence is unlikely to be explained by preferences over entry-level markets, but differential family obligations, attitude toward competition, and mentorship appear to play operative roles. Our findings have implications for policies aiming at outcome-based gender equality, as they reveal how persistent gaps can arise even in an institutionally gender-neutral setting with early-stage equality of opportunity.