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Gender Wage Gap: Systemic Explanations & Social Elasticity in the U.S. Elizabeth O’Neill, ECON 539, 6.4.07. Central Questions:. What evidence documents the wage gap between male and female full-time wage earners? How is the wage differential measured through various economic models?

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gender wage gap systemic explanations social elasticity in the u s

Gender Wage Gap:Systemic Explanations & Social Elasticity in the U.S.

Elizabeth O’Neill, ECON 539, 6.4.07

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Central Questions:

  • What evidence documents the wage gap between male and female full-time wage earners?
  • How is the wage differential measured through various economic models?
  • What are the systemic reasons for the inequitable pay distribution between women and men?

Key Sources:

  • Blau, F., Ferber, M. & Winkler, A. (1998) The Economics of Women, Men & Work, 5th edition. Uppersaddle River: Prentice Hall.
  • Karamessini, M & Ioakimoglou, E. (2007).Wage Determination & the Gender Pay Gap: A Feminist Political Economy Analysis & Decomposition. Feminist Economics. 13(1): 31-66.
literature review structure
Literature Review Structure
  • Definition & evidence of gender wage gap
  • Social elasticity models of measurement
  • Summarizing reasons leading to the gender wage gap:
    • Macroeconomic factors
    • Industry specific trends
    • Employer-based discrimination
    • Employee-based causative factors
  • Brief analysis of literature reviewed
wage gap defined
Wage Gap Defined
  • Examines wage differentials between men & women who are performing similar paid work, with two different assumptions: equal conditions and systemic differences.
  • Undisputed consensus regarding the gender wage gap but viewed as either persistent discrimination or cohort-based.
  • Female-to-male earnings ratio ranged from 57% to 81% since WWII.
social elasticity
Social Elasticity
  • Construction of Wage Differentials
    • Neoclassical Economic Theory
      • Human Capital Theory
    • Occupational Crowding Theory
      • Determined by % female within occupations
    • Feminist Marxian Analysis
macroeconomic determinants
Macroeconomic Determinants
  • “Feminization of Labor”
    • Concentration of low-wage, low-skilled jobs based on expectations of women’s unpaid labor
    • Reinforces gender differences
    • U.S. transition from goods to service based economy
  • *Occupational Segregation
    • Strong demonstration that female-dominated occupations depress wages for both men and women
industry based factors
Industry-Based Factors
  • Changes in public sector employment
    • More women employed in public sector equates to a lessening of the wage gap
    • Contributing factors are varied occupational distribution, attention to nondiscriminatory recruitment and retention efforts, and higher unionization rate.
  • Level of unionization
    • Higher unionization rates improves low-skilled women’s wages
    • De-unionization depresses men’s wages but not women’s, resulting in a lessening of the gap by proxy
employer based factors
Employer-Based Factors
  • Starting wage divide
    • Slight difference at start of career, but exponentially grows
  • Unequal promotion and compensation rates
  • Organization size:
    • Wage gap in small organizations: 29%
    • Medium: 15%
    • Large: 17%
    • Larger: 24%
    • Differences explained by level of educational returns and access to supervisory positions
employee based factors
Employee-Based Factors
  • Workforce participation gaps: Women’s wages have increased with delayed marriages and lower fertility rates
  • Lack of educational investment
    • early education (HS pro technical, math)
    • later education (college attainment)
  • Negotiation skill disparity contributing to inequitable starting wages
summary of influential factors
Summary of Influential Factors

Percentage of wage gap (dependent) =

βo + γ1(percent female within occupation) +

γ2(educational attainment level) + γ3(continuity of employment) + γ4(on-the-job training access) +

γ5(union participation) + γ6(public sector) +

γ7(starting wage) + γ8(access to job mobility) + γ9(access to supervisory positions) + γ10(organizational size) +

γ11(labor force continuity) + γ12(educational investments)

analysis of reviewed literature
Analysis of Reviewed Literature
  • Cohort perspective would take six decades to reconcile the gender wage difference, longer if economic trends influence the current projections.
  • Persistent discrimination is a complex relationship; researchers largely believe remnants remain.
  • Measuring the wage differential will need to incorporate demonstrated attenuating variables.
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Policy Implications

  • The most equitable competitive equilibrium will require continued government intervention for both supply and demand sides of labor.
  • Current national policies address employer-based discrimination; further attention needed for systemic, industry-related, and individual-based causations.

Questions?