Research Findings

Women’s changing occupational careers and gender wage inequality

April 17, 2018

The narrowing of the gender wage gap is an important indicator of progress toward gender equality. This pay gap narrowed substantially during the 1980s and then more slowly during the 1990s and early 2000s.  After 2007, wage convergence ceased entirely. Why?

Conventional analyses attribute changes in the female-male wage ratio to corresponding changes in the work experience and qualifications of the female workforce. My research broadens this focus by examining how changes in women’s occupational career paths, and in the relative earnings of the occupations to which those career paths lead, impacted the gender wage gap over the period 1979 to 2015.

A defining feature of the social division of labor over the past century has been the expansion and feminization of market-based care, services traditionally provided by women in families.  Feminist scholars often distinguish between nurturant care provided through medical, educational, and social services and non-nurturant (reproductive) care provided through cooking, cleaning, and laundry services.  As market-based activities, both forms of care work expanded over the course of the past century. 

In contrast to the long-standing overrepresentation of women in care-providing occupations, the relatively rapid entry of female workers into managerial and professional occupations that are not part of the care economy can be traced back to the 1970s.  Using data from the Current Population Survey, a wage decomposition shows how changes in the female employment shares and relative wages of nurturant and reproductive care occupations, and of managerial and professional occupations outside of the care economy, help to explain the 1980s wage convergence and its subsequent slowing and cessation. 

The expansion and/or feminization of an occupation’s workforce affect gender wage inequality only to the extent that the occupational wage differs from the workforce average.  Conversely, an increase or decrease in the relative occupational wage will affect the pay gap depending not only on the occupation’s employment share, but also on the proportion of its services that are provided by female workers.  As the ratio of female-to-male service providers approaches 1.0, the effect of occupational wage gains (or losses) cancels out.  Bearing these considerations in mind, the results of the analysis can be briefly summarized:

First, the employment shifts affecting the pay gap were largely limited to managerial and reproductive care occupations and to the final decades of the last century.  Female entry into managerial occupations – with high and rapidly rising wages – accounted for nearly a tenth of the wage convergence that occurred during the 1980s (9.2%) and 1990s (8.1%).  The female share of managerial employment levels off after 1999 and has no subsequent impact on the pay gap.  At the opposite end of the wage distribution, the sharp drop in the number of (female) private household workers, and consequent decline in the female share of low-wage reproductive care occupations, also contributed to wage convergence during these decades. 

Second, the increase in the price (i.e., relative wage) of nurturant care, increasingly provided by female workers, accounted for nearly a fifth of the overall wage convergence in decompositions that include only occupational measures. However, this price effect greatly diminished when controls for industry location were added.  In other words, rapid wage growth in the industries where women, including nurturant care providers, work (e.g., hospitals and health services) narrowed the pay gap during the 1980s and 1990s.  The effect of differential industry wage growth on gender earnings inequality also diminishes, and eventually ceases, after 1999. 

Finally, occupational employment and wage change are closely interlinked with changes in the other determinants of wage convergence.  Consistent with the findings of previous studies, most of the gender wage convergence was attributable to unobserved factors, presumably including unmeasured changes in women’s work effort and commitment.  Most of the slowdown and eventual cessation of wage convergence was also explained by the diminished effect both of unobserved factors and of women’s relative gains in education and experience. 

These observed and unobserved components of wage convergence are statically independent of occupational change, but they are not unrelated.  The educational and experience gains of female workers, and any strengthening of their work commitment and effort, developed in conjunction with, and partly in response to, improved career opportunities.  And the cessation of wage convergence after 2007 indicates that any relative improvement in women’s earnings-related characteristics are having little effect the remaining wage gap in the absence of further occupational career gains. 

The study’s findings help to identify both the continuing sources of gender wage inequality and possible directions for future research. 

One important finding is that wage dispersion continues to widen the pay gap.  Previous studies have documented how female workers are “swimming upstream,” raising their average earnings within a widening distribution.  Swimming against this current is particularly difficult in the U.S. which relies upon legislated increases in the minimum wage to raise the wage floor and compress the earnings distribution.  The linkages between a falling wage floor, eroding work standards, and gender earnings inequality remain important topics for future research. 

A second finding concerns the relative importance of the within- and between-occupational portions of the gender wage gap.  Previous researchers have reported that most of the gender pay gap resides within occupations. Comparing the within- and between-occupation components tells us how much of the wage gap would be eliminated if we were to equalize women’s and men’s average earnings within each occupation as opposed to equalizing the distribution of female and male workers across occupations.  It appears that continued progress in closing the wage gap will depend on equalizing women’s and men’s average occupational earnings. 

One explanation for within-occupational wage differences emphasizes the allocative and evaluative processes that adversely affect the quality of women’s job matches.  Several recent studies document the tendency of couples to prioritize men’s earnings in making (re)location decisions.  Like the more thoroughly investigated motherhood wage penalty, these discriminatory processes reflect gender status beliefs that accord a lesser value to female labor and thereby justify women’s reduced earnings. 

As feminist scholars have long contended, the widespread attainment of high-status occupations by women remains crucial to overcoming these status beliefs and discriminatory evaluations, and to equalizing female-male earnings in the process.  

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