Gender-Specific Wage Structure and the Gender Wage Gap in the U.S. Labor Market

Assaf Rotman*, Hadas Mandel

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper challenges the predominant conceptualization of the wage structure as gender-neutral, emphasizing the contribution that this makes to the gender wage gap. Unlike most decomposition analyses, which concentrated on gender differences in productivity-enhancing characteristics (the ‘explained’ portion), we concentrate on the ‘wage structure’ (the ‘unexplained’ portion), which can be defined as the market returns to productivity-enhancing characteristics. These returns are commonly considered a reflection of non-gendered economic forces of supply and demand, and gender differences in these returns are attributed to market failure or measurement error. Using PSID data on working-age employees from 1980 to 2010, we examine gender differences in returns to education and work experience in the U.S. labor market. Based on a threefold decomposition, we estimate the contribution of these differences to the overall pay gap. The results show that men’s returns to education and work experience are higher than women’s; and that in contrast to the well-documented trend of narrowing gender gaps in skills and earnings, the gaps in returns increase over time in men’s favor. Furthermore, the existing gender differences in returns to skills explain a much larger proportion of the gender wage gap than differences in levels of education and experience between men and women. The paper discusses the mechanisms underlying these findings.

Original languageEnglish
Pages (from-to)585-606
Number of pages22
JournalSocial Indicators Research
Volume165
Issue number2
DOIs
StatePublished - Jan 2023

Funding

FundersFunder number
Horizon 2020 Framework Programme724351
European Research Council641

    Keywords

    • Gender inequality
    • Gender pay gap
    • Returns to education
    • Returns to skills
    • Returns to work experience
    • Wage structure

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