The Narrowing of the Male - Female Wage

According to several measures, the difference in wages between men and women, the so-called " male-female wage gap " (MFWG), has shrunk substantially—by about half—over the past several decades. This phenomenon has been the subject of much research, speculation, and contention. For example, some seek to explain why the gap narrowed so dramatically in the 1980s only to narrow much more slowly in subsequent years. Others have considered the role of new technology, which may have helped level the playing field between the sexes; this view recalls the rise of office work at the turn of the 20 th century, which is also thought to have benefited women (Goldin 1990). In this Letter, we focus on an important portion of the research in this area, particularly as it pertains to the very sharp decline in the MFWG during the 1980s. We summarize three of the more well-known possible explanations: declining discrimination against women, rising skills and workforce attachment of women, and changing selection.While each has strong merit in its own right, none has come to be the dominant explanation. We speculate that it may be fruitful, though challenging, to consider whether these three explanations worked together, occurring simultaneously and reinforcing one another, to result in the sharp narrowing of the MFWG in the 1980s. Measuring the male-female wage gap There are several ways to compare the wages of males and females, and no single measure is perfect or preferable in every instance.The method most often used in academic studies is to examine hourly wages for only full-time workers using data sets such as the Current Population Survey (CPS) or Decennial Census.These studies typically measure the difference in wages between the sexes after controlling for differences in years of education and age.This approach ensures that, for example, the wage of a 50-year-old female with a post-college degree is not directly compared to that of an 18-year-old male who dropped out of high school. Figure 1 presents estimates of the evolution of the MFWG from 1979 to 2005 using CPS data and controlling for age and years of education. It shows that the average hourly wages of men who worked full time in 1979 were 37% higher than the wages of their female counterparts.These estimates, like those of others, show that the MFWG fell at a rapid rate through the 1980s and then decelerated in the 1990s and 2000s.Viewed in a historical …