The Impact of Wage Structure on Trends in U.S. Gender Wage Differentials 1975-1987

59 Pages Posted: 19 Jun 2000 Last revised: 24 Jun 2010

See all articles by Francine D. Blau

Francine D. Blau

Cornell University - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics; German Institute for Economic Research (DIW Berlin)

Lawrence M. Kahn

Cornell University - School of Industrial and Labor Relations; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Date Written: May 1994

Abstract

The U.S labor market experienced two dramatic developments over the past twenty years: a falling male-female pay gap and a rising level of wage inequality. This paper uses Michigan Panel Study on Income Dynamics (PSID) data for 1975 and 1987 and Current Population Survey (CPS) data for 1971 and 1988 to analyze how this dramatic decline in the gender gap was achieved in the face of shifts in overall wage structure that were increasingly unfavorable to low wage workers. The decrease is traced to a rise in women's relative experience levels and occupational status, and a larger negative impact of de-unionization on male than female workers. In addition, there was a substantial decline in the 'unexplained' portion of the pay gap. These 'gender-specific' factors were more than sufficient to counterbalance changes in both measured and unmeasured prices which worked against women. Using a simply supply and demand framework, we find that the net effect of supply and demand shifts was unfavorable for women as a group: shifts in the composition of demand during this period favoring female workers were more than offset by the rising relative supply of women. However, supply and demand changes match up fairly well with observed relative changes in the gender gap among skill groups, specifically a faster closing of the gap at the bottom of the skill distribution than at the top. Moreover, our analysis of the sources of the greater progress at the bottom than at the top is consistent with the operation of demand and supply forces.

Suggested Citation

Blau, Francine D. and Kahn, Lawrence M., The Impact of Wage Structure on Trends in U.S. Gender Wage Differentials 1975-1987 (May 1994). NBER Working Paper No. w4748. Available at SSRN: https://ssrn.com/abstract=227011

Francine D. Blau (Contact Author)

Cornell University - Department of Economics ( email )

265 Ives Hall
Ithaca, NY 14853-3901
United States
607-255-4381 (Phone)
607-255-4496 (Fax)

HOME PAGE: http://www.ilr.cornell.edu/directory/fdb4/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics ( email )

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

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Lawrence M. Kahn

Cornell University - School of Industrial and Labor Relations ( email )

265 Ives Hall
Ithaca, NY 14853-3901
United States
607-255-0510 (Phone)
607-255-4496 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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

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