Working Paper: NBER ID: w21913
Authors: Francine D. Blau; Lawrence M. Kahn
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.
Keywords: gender wage gap; human capital; occupational segregation; discrimination
JEL Codes: J16; J24; J31; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| improvements in women's education and labor market experience (J49) | gender wage gap narrowing (J31) |
| gender wage gap narrowing (J31) | women earning approximately 79% of what men earn by 2010 (J31) |
| unexplained component of wage gap decreases (J79) | persistent discrimination or other unmeasured factors (C41) |
| human capital factors (J24) | explain wage gap (J31) |
| gender differences in occupation and industry (J21) | critical for wage gap (J31) |
| unexplained gender wage gap larger at top of wage distribution (J31) | existence of a 'glass ceiling' (J79) |