The impact of gender differences in occupational attainment on the relative earnings of young workers

Abstract

This study investigates the potential influence that gender differences in occupational structures have upon the relative earnings of young women in the US labour market. The empirical methodology integrates a multinomial logit model of occupational attainment with estimated human capital wage equations across occupations. Empirical analysis of data from the 1979 cohort of the NLSY suggests that nearly two-thirds of the gender gap in hourly earnings results from men having more favourable earnings structures within occupations, relative to their female colleagues. Gender differences in occupational distributions apparently have a minor impact on the relative earnings of women.

Notes

¹ The analysis is limited to white, non-Hispanic workers to simplify the discussion, and to avoid the additional influences of race and ethnicity. Thus, black and Hispanic workers were excluded from the samples.

² Expressions 4 and 5 use the male occupational and wage structures as benchmarks. Thus, it is assumed that the processes which determine earnings and occupational attainment for men are free from labour market discrimination.

³ Given the sample sizes for the NLSY, several occupational categories were combined (e.g., Service and Labourers). The use of six occupational categories is consistent with the number of occupations used in other studies: Gill, 1994 (six categories); Gabriel and Schmitz, 1989 (eight categories); Miller, 1987 (six categories).

⁴ The index of dissimilarity is defined as:

where P represents the percentage of males (M) or females (F) in occupation j. ID ranges from 0 to 100, with 100 indicating complete occupational segregation by gender, and 0 indicating identical occupational distributions for men and women.