Working Paper: NBER ID: w30821
Authors: Peter Q. Blair; Benjamin Posmanick
Abstract: During the 1980s, the wage gap between white women and white men in the US declined by approximately 1 percentage point per year. In the decades since, the rate of gender wage convergence has stalled to less than one-third of its previous value. An outstanding puzzle in economics is "why did gender wage convergence in the US stall?" Using an event study design that exploits the timing of state and federal family-leave policies, we show that the introduction of the policies can explain 94% of the reduction in the rate of gender wage convergence that is unaccounted for after controlling for changes in observable characteristics of workers. If gender wage convergence had continued at the pre-family leave rate, wage parity between white women and white men would have been achieved as early as 2017.
Keywords: gender wage convergence; family leave policies; wage gap
JEL Codes: J16; J31; J32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| prior rate of gender wage convergence (J79) | wage parity between white women and white men by 2017 (J79) |
| introduction of state and federal family leave policies (J12) | reduction in the rate of gender wage convergence (J79) |
| introduction of family leave policies (J12) | stall in gender wage convergence rate (J31) |
| decline in the 'gap effect' (F62) | stagnation in wage convergence (F62) |