Chapter%208:%20Women

1
Chapter 8 Womens Earnings, Occupations, and
the Labor Market

• Year 2002
• FT employed females earned 77.5 of FT employed
  males.
• Female wage growth more than twice inflation
• Male wage growth less than inflation.
• Sources of differences
• 1) Human capital
• 2) Occupation
• 3) Compensating Differentials (?)
• 4) Discrimination

2
Data on Earnings Differences

• See Table 8.1
• 2001 data by sex and race/ethnicity.
• See Figure 8.1
• shows time trend in sex earnings ratio.
• See Figure 8.2
• Age-earnings profiles for college grad and HS
  grad.

3
Research by Blau and Kahn (2001)

• Source of improvement in gender earnings ratio
• 1) better economic status of new LF entrants
• 2) better conditions for persons already working
  as they progress thru careers.
• Table 8.2
• Data CPS data on FT workers
• Read across row how same-aged successive cohorts
  fare.
• Top Panel Read diagonally follow same cohort
  as it ages 10 years.
• Bottom panel ? over time
  
• While each successive group of women fared better
  than its predecessors, something happens at about
  ages 18-40 that hurts womens earnings relative
  to mens earnings.

4
Further Detail on Gender Earnings Gap

• Figure 8.2 annual earnings ratio by education
  level.
• Point of breakdown by education is to eliminate
  one logical source of gender earnings
  differences.
• See little variation for different education
  levels (except for professional degrees).
• Figure 8.3 distribution of earnings
• See congestion of women at very low earnings.
• Table 8.3 international differences in gender
  earnings ratio and changes over time.
• See US ratio is low in 1st period.
• At end US in middle its gap rose most during
  this period.

5
Occupational Segregation

• Definition crowding of men into mens jobs and
  women into womens jobs
• Table 8.4 3-page table showing the percentage of
  workers in each occupation that are female.
• Duncan Index a summary measure for an economy
  used to measure the degree of occupational
  segregation.
• S ½ ?i?Mi - Fi?
• Mi, Fi are males/females in LF who work in
  occupation i.
• If no occup segregation, Mi Fi and so the
  difference 0 so S0.
• If much segregation, Mi Fi is a big number and
  so S is large.
• With complete segregation, S 100.
• S M or W who would have to change occupation
  to eliminate segregation.

6
Compensating Wage Differentials

• Helps to explain why wages may be different for
  different occupations even if it appears as
  though same skills required of workers.
• Definition wage differences that compensate for
  differences in job characteristics across
  occupations.
• These job characteristics can be both good and
  bad characteristics
• Risk of injury
• Physical comfort
• Job flexibility

7

• Key to compensating wage differential model
  changes underlying assumption of standard labor
  market model of homogeneity of jobs/workers.
• Now workers and jobs differ and individuals sort
  themselves into jobs that best suit their
  preferences
• Result
• 1) wages differ
• 2) wage difference not as big as might be
  expected.
• Relates to comparable worth argument
• Equal pay for jobs of equal value assumes market
  fails in wage-setting BUT market does account for
  worker/job heterogeneity, which is hard to
  replicate by job evaluations.
• May explain some of gender wage gap but empirical
  evidence inconclusive.