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Chapter 2 The Gender Pay Gap: Going, Going . . . but Not Gone Francine D. Blau and Lawrence M. Kahn A s the title of our chapter implies, the trends in the gender pay gap in the United States form a somewhat mixed picture. On the one hand, after nearly half a century of stability in the earnings of women relative to men, starting in 1930, there has been since the late seventies a substantial increase in women’s relative earnings.1 What makes this development especially dramatic and significant is that the recent changes contrast markedly with the relative stability of earlier years. Moreover, while not the focus of our attention here, it is worth mentioning that since the seventies there have also been major changes in the types of jobs in which women and men are employed, and a marked entry of women into jobs that had traditionally been overwhelmingly male.2 These post-1980 earnings changes are also interesting because women’s gains in wage parity with comparable men have been prevalent across a wide spectrum. At first, a large portion of the female gains were centered on younger women, but now women of all ages have narrowed the pay gap with men, though younger women’s gains may be somewhat greater. The same broad progress is visible when we look at the trends in the gender pay gap by education. Less-educated women have narrowed the pay gap with less-educated men and highly educated women have reduced the pay gap with highly educated men. The earnings gains of women are particularly remarkable because they have occurred during a period when overall wage inequality was rising: over approximately the past quarter-century the difference in pay between workers with high wages and workers with low wages has widened considerably. Yet, women, a lowpaid group, have nonetheless been able to narrow the pay gap with a relatively better-paid group, men. These findings support our initial observations that women have made significant progress in narrowing the gender pay gap. Nonetheless, women continue to earn considerably less than men on average, and the convergence of men’s and / 37 women’s pay slowed noticeably in the 1990s. Although there were some gains for women in the early 2000s, the long-run significance of this recent experience is unclear . The evidence that convergence has slowed in recent years suggests the possibility that the narrowing of the gender pay gap will not continue into the future. Moreover, there is evidence that although discrimination against women in the labor market has declined, some discrimination does still exist. A final point relating to the mixed labor-market progress of women is that although the gender pay gap has narrowed, we see a rising gap between how well highly skilled, highly educated women and less-skilled and less-educated women are faring. Precisely this pattern is also observed among men, but it has less often been recognized as occurring among women as well. Such rising returns to skill underlie the trend toward rising overall wage inequality that we alluded to above. In this chapter, we first consider why there has been so much focus on the gender pay gap and why this disparity and its sources continue to garner considerable interest among social scientists in general and economists in particular. We then review the trends in detail. Following that, we consider explanations for the pay gap in general and for the convergence that we have seen so far. Next, we document the growing gaps between more- and less-educated women because this is a piece of the story that is generally less well known. Finally we attempt to gaze into our crystal ball and consider the future. However, it is important to realize that when social scientists or economists consider the future, they are probably wrong as often as they are right. And the mixed picture we have described here for trends in the gender pay gap makes the future especially difficult to predict. Thus it is difficult to say whether and when robust convergence in the gender pay gap will resume. WHY WAGES ARE IMPORTANT First and most obvious, wages are important because they affect people’s economic well-being. It is of course important to recognize that there is not necessarily a one-to-one correlation between wages and well-being: a low-wage person could be part of a family in which there are many high-wage...

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