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The Evolution of Lifetime Hours and the Gender Wage Gap

Author

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  • Oksana Leukhina
  • Guillaume Vandenbroucke

Abstract

The gender wage gap decreased (opened) from 1940 to 1975 and then increased (closed) until 2010. We use the model introduced in Ben-Porath (1967) to assess the role of gender differences in life cycle profiles of market time in explaining this dynamics. Men's profiles changed little across cohorts, but women's profiles converged to that of men implying, eventually, stronger incentives for women to accumulate human capital. We calibrate the model and find that (1) The 1940-75 decrease of the gap was because men valued human capital more than women due to their working more. The 1975-10 increase was because men's valuation of human capital remain mostly unchanged while women's increased. (2) If men had the hours profiles of women, the wage gap would have closed continuously since 1940 (ceteris paribus), but its level in 2010 would be close to its observed level.

Suggested Citation

  • Oksana Leukhina & Guillaume Vandenbroucke, 2022. "The Evolution of Lifetime Hours and the Gender Wage Gap," Working Papers 2022-025, Federal Reserve Bank of St. Louis, revised Sep 2023.
    • Handle: RePEc:fip:fedlwp:94804
    DOI: 10.20955/wp.2022.025
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    References listed on IDEAS

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    1. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-1552, September.
    2. Mark Huggett & Gustavo Ventura & Amir Yaron, 2011. "Sources of Lifetime Inequality," American Economic Review, American Economic Association, vol. 101(7), pages 2923-2954, December.
    3. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352.
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    More about this item

    Keywords

    gender wage gap; selection bias; female labor force participation; on-the-job investment; human capital; hours;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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