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Two Sides of the Same Coin: U.S. "Residual" Inequality and the Gender Gap

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  • Marigee P. Bacolod
  • Bernardo S. Blum

Abstract

We show that the narrowing gender gap and the growth in earnings inequality are consistent with a simple model in which skills are heterogeneous, and the growth in skill prices has been particularly strong for skills with which women are well endowed. Empirical analysis of DOT, CPS, and NLSY79 data finds evidence to support this model. A large increase in the prices of cognitive and people skills—skills with which women are well endowed—and a decline in the price of motor skills account for up to 40 percent of the rising inequality and 20 percent of the narrowing gender gap.

Suggested Citation

  • Marigee P. Bacolod & Bernardo S. Blum, 2010. "Two Sides of the Same Coin: U.S. "Residual" Inequality and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
  • Handle: RePEc:uwp:jhriss:v:45:y:2010:i:1:p197-242
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    References listed on IDEAS

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    1. Borghans, Lex & Weel, Bas ter & Weinberg, Bruce A., 2005. "People People: Social Capital and the Labor-Market - Outcomes of Underrepresented Groups," Research Memorandum 002, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
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    6. Edward N. Wolff, 2003. "Skills and Changing Comparative Advantage," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 77-93, February.
    7. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    8. Casey B. Mulligan & Yona Rubinstein, 2004. "The Closing of the Gender Gap as a Roy Model Illusion," NBER Working Papers 10892, National Bureau of Economic Research, Inc.
    9. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-392, June.
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