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Women's Economic Progress and Inequality

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  • L Yuetyee Wong

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Abstract

This paper explores links between women's economic progress and widening inter-industry wage differentials. Each phenomenon arises because of technological change that has favored young women's human capital, in what is called sex-biased technological change. Such technological change helps lower the costs of women of bringing their abilities to the market, enabling more of them to gravitate to the high-tech sector, shifting the relative skill supply. Our theory can simultaneously rationalize the facts on increasing female wages and their participation in the high-tech sector, wage premium favoring the high-tech sector, and female to male wage ratios. Our theory also predicts an amplification of the selection effect on gender difference in productivity in the high-tech sector. We use workers' skill indexes given by the Dictionary of Occupational Titles to determine technology sectors. Results based on state-level data indicate the elasticity of substitution between high and low-skill workers is around 2. We provide evidence in favor of sector participation and wage patterns predicted by our model. The allocative impact of sex-biased technological change is 8 to 10 times larger than the wage effect. The results are robust for all measures of patent innovation.

Suggested Citation

  • L Yuetyee Wong, 2006. "Women's Economic Progress and Inequality," 2006 Meeting Papers 477, Society for Economic Dynamics.
  • Handle: RePEc:red:sed006:477
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    Cited by:

    1. Michelle Rendall, 2010. "Brain versus Brawn: The Realization of Women's Comparative Advantage," 2010 Meeting Papers 926, Society for Economic Dynamics.

    More about this item

    Keywords

    sector choice; directed technological change; gender wage gap;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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