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Gender Wage Differentials, Affirmative Action, and Employment Growth on the Industry Level

Author

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  • Judith Fields

    (The Jerome Levy Economics Institute)

  • Edward N. Wolff

    (The Jerome Levy Economics Institute)

Abstract

The present study examines factors that might explain the difference between female and male industry wage premia. It focuses on three industry characteristics in particular -- the extent to which firms in each industry were likely to be targeted for Affirmation Action compliance review or investigation, industry employment growth, and industry profitability. We find strong evidence that all three factors help narrow the gender gap in industry wage premia. Other characteristics that we have looked at, including average plant size, the capital intensity of the production process, both the average level and variance in work education, and changes in overall sales and wage levels were statistically much less important. Our principal finding is that Affirmation Action, employment growth, and profitability each leads to a narrowing of the gender gap in industry wage premia. These effects act independently of each other. With regard to the Affirmation Action variable, our results contract sharply with those of Leonard (1996), who concludes that Affirmative Action had lost its effectiveness as a measure to reduce the gender wage gap in the 1980s. The difference in results is likely attributable to the fact that the dependent variable in his regression analysis is the gender gap in earnings, whereas ours is the gender gap in industry wage premia. In terms of policy implications, our results provide new support to the recent effectiveness of the Affirmative Action program, which is currently under fire from so many sources and has been greatly diminished in size and is also clear that import-competing industries, for which output prices and sales declined during this period, showed smaller wage increases for all workers during the 1980s. This would narrow the gender gap in wage premia, if males had been more likely than females to benefit from rent sharing before the decline in demand for the industry's output, or if males at the top of the wage ladder were more likely than others, of both genders, to have left these industries when demand and pay declines. Sachs and Shatz (1996) support this argument with the observation that the overall gender gap in wages tended to narrow in these industries.

Suggested Citation

  • Judith Fields & Edward N. Wolff, 1997. "Gender Wage Differentials, Affirmative Action, and Employment Growth on the Industry Level," Macroeconomics 9711005, EconWPA.
  • Handle: RePEc:wpa:wuwpma:9711005
    Note: Type of Document - WordPerfect; prepared on IBM PC; to print on PostScript; pages: 46; figures: included
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    References listed on IDEAS

    as
    1. Pugel, Thomas A, 1980. "Profitability, Concentration and the Interindustry Variation in Wages," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 248-253, May.
    2. Donohue, John J, III & Heckman, James, 1991. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1603-1643, December.
    3. Francine D. Blau & Lawrence Kahn, 1995. "The Gender Earnings Gap: Some International Evidence," NBER Chapters,in: Differences and Changes in Wage Structures, pages 105-144 National Bureau of Economic Research, Inc.
    4. Nachum Sicherman, 1996. "Gender Differences in Departures from a Large Firm," ILR Review, Cornell University, ILR School, vol. 49(3), pages 484-505, April.
    5. Leonard, Jonathan S, 1984. "The Impact of Affirmative Action on Employment," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 439-463, October.
    6. Jonathan S. Leonard, 1985. "The Effectiveness of Equal Employment Law and Affirmative Action Regulation," NBER Working Papers 1745, National Bureau of Economic Research, Inc.
    7. Leonard, Jonathan S, 1986. "What Was Affirmative Action?," American Economic Review, American Economic Association, vol. 76(2), pages 359-363, May.
    8. Masters, Stanley H, 1969. "An Interindustry Analysis of Wages and Plant Size," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 341-345, August.
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    12. Gittleman, Maury & Wolff, Edward N, 1993. "International Comparisons of Inter-industry Wage Differentials," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 295-312, September.
    13. Peter Dolton & Donal O'Neill & Olive Sweetman, 1996. "Gender Differences in the Changing Labor Market: The Role of Legislation and Inequality in Changing the Wage Gap for Qualified Workers in the United Kingdom," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 549-565.
    14. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
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