1. Gender Wage Gap: Systemic Explanations & Social Elasticity in the U.S. Elizabeth O’Neill, ECON 539, 6.4.07

2.  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. Central Questions:

3. 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

4. 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.

6. Social Elasticity  Construction of Wage Differentials Neoclassical Economic Theory  Human Capital Theory Occupational Crowding Theory  Determined by % female within occupations Feminist Marxian Analysis

7. 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

8. 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

9. 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

10. 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

11. Summary of Influential Factors Percentage of wage gap (dependent) = βo + γ 1 (percent female within occupation) + γ 2 (educational attainment level) + γ 3 (continuity of employment) + γ 4 (on-the-job training access) + γ 5 (union participation) + γ 6 (public sector) + γ 7 (starting wage) + γ 8 (access to job mobility) + γ 9 (access to supervisory positions) + γ 10 (organizational size) + γ 11 (labor force continuity) + γ 12 (educational investments)

12. 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.

13. Policy Implications Questions?  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.