The Effects of Rising Female Labor Supply on Male Wages

35 Pages Posted: 20 Sep 2000 Last revised: 24 Oct 2021

See all articles by Chinhui Juhn

Chinhui Juhn

University of Houston - Department of Economics; IZA Institute of Labor Economics

Dae Il Kim

Rice University - Department of Economics

Date Written: August 1995

Abstract

This paper examines the extent to which rapid increases in female labor supply contributed to rising wage inequality and to declining real wages of less skilled males during the 1980s. We find that while the male wage declines are concentrated in the 1980s, female labor supply growth slowed in the 1980s relative to the 1970s. Women also increased the relative supply of skill in the economy in the 1980s. We find these findings to be inconsistent with a simple story in which supply shifts among women have played a major role. Instead, they further support the view that demand shifts, rather than supply shifts, have been the underlying cause of declining opportunities for less skilled males and rapid inequality growth in the 1980s. We also use state and SMSA-level data to estimate cross- substitution effects between men and women of different skill types. We find weak evidence that women may be substitutes for high school dropout men and that college educated women may have contributed to wage inequality growth by being better substitutes for high school dropout men than high school graduate men. We end with some suggestive evidence that unmeasured demand shifts which favored skilled female workers over less skilled male workers may be biasing our results towards finding substitution between these two groups.

Suggested Citation

Juhn, Chinhui and Kim, Dae Il, The Effects of Rising Female Labor Supply on Male Wages (August 1995). Available at SSRN: https://ssrn.com/abstract=225300

Chinhui Juhn (Contact Author)

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States
713-743-3823 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Dae Il Kim

Rice University - Department of Economics

P.O. Box 1892
Houston, TX 77251-1892
United States

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