Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Gender Wage Gap: Extent, Trends, and Explanations Abstract Using PSID microdata over the 1980-2010, we provide new empirical evidence on the extent of and trends in the gender wage gap, which declined considerably over this period. By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution that at the middle or the bottom and by 2010 was noticeably higher at the top. We then survey the literature to identify what has been learned about the explanations for the gap. We conclude that many of the traditional explanations continue to have salience. Although human capital factors are now relatively unimportant in the aggregate, women's work force interruptions and shorter hours remain significant in high skilled occupations, possibly due to compensating differentials. Gender differences in occupations and industries, as well as differences in gender roles and the gender division of labor remain important, and research based on experimental evidence strongly suggests that discrimination cannot be discounted. Psychological attributes or noncognitive skills comprise one of the newer explanations for gender differences in outcomes. Our effort to assess the quantitative evidence on the importance of these factors suggests that they account for a small to moderate portion of the gender pay gap, considerably smaller than say occupation and industry effects, though they appear to modestly contribute to these differences. JEL-codes: J160, J240, J310, J710. Terms of use: Documents in

Using Panel Study of Income Dynamics (PSID) microdata over the 1980–2010 period, we provide new empirical evidence on the extent of and trends in the gender wage gap, which declined considerably during this time. By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution than at the middle or bottom and by 2010 was noticeably higher at the top. We then survey the literature to identify what has been learned about the explanations for the gap. We conclude that many of the traditional explanations continue to have salience. Although human-capital factors are now relatively unimportant in the aggregate, women's work force interruptions and shorter hours remain significant in high-skilled occupations, possibly due to compensating differentials. Gender differences in occupations and industries, as well as differences in gender roles and the gender division of labor remain important, and research based on experimental evidence strongly suggests that discrimination cannot be discounted. Psychological attributes or noncognitive skills comprise one of the newer explanations for gender differences in outcomes. Our effort to assess the quantitative evidence on the importance of these factors suggests that they account for a small to moderate portion of the gender pay gap, considerably smaller than, say, occupation and industry effects, though they appear to modestly contribute to these differences. ( JEL I26, J16, J24, J31, J71)

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We consider the gender pay gap in the United States. Both gender-specific factors, including gender differences in qualifications and discrimination, and overall wage structure, the rewards for skills and employment in particular sectors, importantly influence the gender pay gap. Declining gender differentials in the U.S., and the more rapid closing of the gender pay gap in the U.S. than elsewhere, appear to be primarily due to gender-specific factors. However, the relatively large gender pay gap in the U.S. compared to a number of other advanced countries seems primarily attributable to the very high level of U.S. wage inequality. Over the past 25 years, the gender pay gap has narrowed dramatically and women have increasingly entered traditionally male occupations. These two labor market outcomes are closely linked, since considerable research suggests that predominantly female occupations pay less, even controlling for measured personal characteristics of workers and a variety of characteristics of occupations, although the interpretation of such results remains in some dispute.1 In this article, wedescribe these important gains, analyze their sources, and point to some significant remaining gender differences. We also assess where American women stand relative to women in other countries and conclude with some thoughts about future prospects for the gender pay gap. Overview of Gender Differences and Trends EarningsGender earnings disparities in the United States have shown considerable recent convergence. Figure 1 shows the trends in the female-male earnings ratio for annual earnings of year-round, full-time workers and for usual weekly earnings of full-time workers. These measures can be thought of as adjusting for the fact that women as a group tend to work fewer weeks per year and hours per week than men. (Government data are not available for wage rates over this period.)The data indicate that the gender ratio was roughly constant at about 60 percent from the late 1950s to about 1980. Indeed, as Fuchs (1971, p. 9) pointed out, this longstanding ratio had a biblical antecedent in Leviticus (27:1-4), where it is decreed that a woman is worth 30 shekels of silver and a man 50 shekels. The gender earnings ratio began to increase in the late 1970s or early 1980s.Convergence has been substantial: between 1978 and 1999 the weekly earnings of women full-time 1. See, for example, Sorensen (1990). A recent study by Macpherson and Hirsch (1995) using a 1973-93 panel of data from the Current Population Survey finds that the negative wage effect of percent female in the occupation is reduced by at least two-thirds when occupational characteristics are included and longitudinal wage change models are estimated to control for unobserved fixed effects.2 workers increased from 61 percent to 76.5 percent of men's earnings. However, the ratio appears to have plateaued in the mid-1990s. 2This increase in the gender earnings ratio could represent either the entry of new cohorts into the labor market, each one better ...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.

While changes in the demand for skilled labor appear to have led to a widening of the wage structures in many countries during the 1980s, considerable differences in the level of wage inequality remain. In this paper, we examine the sources of these differences, focusing primarily on explaining the considerably higher level of wage inequality in the U.S. We fmd that the greater overall dispersion of the U.S. wage distribution reflects considerably more compression at the bottom of the disthbution in the other countries, but relatively little difference in the degree of wage inequality at the top. While differences in the distribution of measured characteristics help to explain some aspects of the international differences, U.S. labor market prices--that is, higher rewards to labor market skills--arc an important factor. Labor market institutions, chiefly the relatively decentralized wage-setting mechanisms in the U.S. compared to other countries, appear to provide the most persuasive explanation for these international differences in prices.In contrast, the pattern of cross-country differences in relative supplies of and demands for skills does not appear to be consistent with the pattern of observed differences in wage inequality.

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This paper uses micro-data to analyze international differences in the gender pay gap among a sample of ten industrialized nations. We particularly focus on explaining the surprisingly low ranking of the U.S. in comparison to other industrialized countries. Empirical research on gender pay gaps has traditionally focused on the role of gender-specific factors, particularly gender differences in qualifications and differences in the treatment of otherwise equally qualified male and female workers (i.e., labor market discrimination). An innovative feature of our study is to focus on the role of wage structure--the array of prices set for various labor market skills--in influencing the gender gap.The striking finding of this study is the enormous importance of overall wage structure in explaining the lower ranking of U.S. women. Our results suggest that the U.S. gap would be similar to that in countries like Sweden, Italy and Australia (the countries with the smallest gaps)if the U.S. had their level of wage inequality. This insight helps to resolve three puzzling sets of facts: (1) U.S. women compare favorably with women in other countries in terms of human capital and occupational status: (2) the U.S. has had a longer and often stronger commitment to equal pay and equal employment opportunity policies than have most of the other countries in our sample; but (3) the gender pay gap is larger in the U.S. than in most industrialized countries.An important part of the explanation of this pattern is that the labor market in the U.S. places a much larger penalty on those with lower levels of labor market skills (both measured and unmeasured Only Japan with a ratio as low as 50 percent had a consistently larger gap (see Figure 1). This paper uses micrc-data to analyze international differences in the gender pay gap among a sample of ten industrialized nations. We particularly focus on explaining the surprisingly low ranking of the U.S. in comparison to other industrialized countries. An advantage of an international perspective is that countries vary considerably with respect to governmental policies, women's relative labor market qualifications and wage-setting institutions. Such variability allows one to infer reasons for differences in the pay gap and, by implication, the impact of alternative government policies.Empirical research on gender pay gaps has traditionally focused on the role of gender differences in qualifications and of differences in the treatment of otherwise equally qualified male and female workers (i.e., labor market discrimination). Analyses of trends over time in the gender differential within countries as well as intercountry comparisons of gender earnings ratios have tended to emphasize these types of gender-specific factors. An innovative feature of our study is to focus on the role of wage structure as an additional factor influencing the gender gap. To analyze the impact of wage structure, we adapt a framework developed by Juhn, Murphy and Pierce (1991) to analyze trends over time in r...