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The Impact of Wage Structure on Trends in U.S. Gender Wage Differentials 1975-1987

  • Francine D. Blau
  • Lawrence M. Kahn

The U.S labor market experienced two dramatic developments over the past twenty years: a falling male-female pay gap and a rising level of wage inequality. This paper uses Michigan Panel Study on Income Dynamics (PSID) data for 1975 and 1987 and Current Population Survey (CPS) data for 1971 and 1988 to analyze how this dramatic decline in the gender gap was achieved in the face of shifts in overall wage structure that were increasingly unfavorable to low wage workers. The decrease is traced to a rise in women's relative experience levels and occupational status, and a larger negative impact of de-unionization on male than female workers. In addition, there was a substantial decline in the 'unexplained' portion of the pay gap. These 'gender-specific' factors were more than sufficient to counterbalance changes in both measured and unmeasured prices which worked against women. Using a simply supply and demand framework, we find that the net effect of supply and demand shifts was unfavorable for women as a group: shifts in the composition of demand during this period favoring female workers were more than offset by the rising relative supply of women. However, supply and demand changes match up fairly well with observed relative changes in the gender gap among skill groups, specifically a faster closing of the gap at the bottom of the skill distribution than at the top. Moreover, our analysis of the sources of the greater progress at the bottom than at the top is consistent with the operation of demand and supply forces.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4748.

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Date of creation: May 1994
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Publication status: Published as "Swimming Upstream: Trends in the Gender Wage Differential in the 1980's" Journal of Labor Economics (January 1997, part 1): 1-42
Handle: RePEc:nbr:nberwo:4748
Note: LS
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  1. David Neumark & Sanders D. Korenman, 1988. "Does marriage really make men more productive?," Finance and Economics Discussion Series 29, Board of Governors of the Federal Reserve System (U.S.).
  2. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
  3. Lawrence F. Katz & Alan B. Krueger, 1992. "The effect of the minimum wage on the fast-food industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
  4. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 67-92 National Bureau of Economic Research, Inc.
  5. Francine D. Blau & Lawrence M. Kahn, 1992. "Race and Gender Pay Differentials," NBER Working Papers 4120, National Bureau of Economic Research, Inc.
  6. Chamberlain, G., 1991. "Quantile Regression, Censoring, And The Structure Of Wages," Harvard Institute of Economic Research Working Papers 1558, Harvard - Institute of Economic Research.
  7. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September.
  8. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
  9. Dora L. Costa & Matthew E. Kahn, 2008. "Learning from the Past," NBER Chapters, in: Heroes and Cowards: The Social Face of War National Bureau of Economic Research, Inc.
  10. Leonard, Jonathan S, 1989. "Women and Affirmative Action," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 61-75, Winter.
  11. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
  12. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
  13. 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 410-42, June.
  14. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
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