I n t h I s c h a p t e r y o u w I l L

T h e S h r i n k i n g P a y G a p
B
Y
J
UNE
E
LLENOFF
O’N
EILL
“Fifty-nine cents,” the popular button
said, a symbol of the stubborn fact that
throughout the post–World War II period,
women’s wages hovered at around 60
percent of men’s, despite an increasing
proportion of women working outside
the home. This gender gap did not de-
cline through the 1960s and the 1970s
despite the rise of the feminist move-
ment, equal pay and employment legisla-
tion, and affirmative action.
But starting in the Reagan years, the
gender gap in wages began to decline
dramatically. By some measures the ratio
of women’s earnings to men’s rose to
nearly 80 percent; and even this number,
I believe, overstates the gender gap be-
tween men and women with similar skills
and training. Why did this dramatic nar-
rowing in relative wages happen?
The answer has less to do with poli-
tics or protests than with the realities of
the labor market. Although basic skills
are acquired in school, it is in the labor
market where specialized skills are de-
veloped that bring higher wages. During
the three decades following World War II
women entered the labor market in
record numbers. But many of the new
entrants had been out of the labor force
for considerable periods of time, raising
their children. These women diluted the
skill level of the rapidly expanding group
of employed women. This was the main
reason why the gender gap in pay did
not narrow during the postwar years.
Today’s working women, particularly
those younger than forty, are much more
nearly equal to men in work experience
than were their mothers. Through delayed
marriage, low fertility, and an increasing
tendency for mothers of young children to
work, women have acquired many more
years of continuous work experience than
was true in the past. (Close to 60 percent
of married women with children under age
six are now in the labor force; in 1960, the
proportion was only 19 percent.)
And the work experience gained by
these younger women is likely to have an
even greater impact on their future earn-
ings because their work experience has
been more correctly anticipated. Many in-
vestment choices affecting careers are
made at younger ages: years of school-
ing, subjects in school, other professional
training. In the past, women were much
less likely than men to invest in lengthy
training because they assumed they
would not be working enough years to
justify it.
In fact, the National Longitudinal
Surveys found that even in the late
1960s less than 30 percent of young
I N T H E N E W S
Men, Women, and Wages

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C H A P T E R 1 9
E A R N I N G S A N D D I S C R I M I N AT I O N
4 3 1
with a greater proportion of white players. One interpretation of these facts is that
customer discrimination makes black players less profitable than white players
for team owners. In the presence of such customer discrimination, a discrimina-
tory wage gap can persist, even if team owners care only about profit.
A similar situation once existed for baseball players. A study using data
from the late 1960s showed that black players earned less than comparable
white players. Moreover, fewer fans attended games pitched by blacks than
games pitched by whites, even though black pitchers had better records than
white pitchers. Studies of more recent salaries in baseball, however, have found
no evidence of discriminatory wage differentials.
Another study, published in the 
Quarterly Journal of Economics
in 1990, ex-
amined the market prices of old baseball cards. This study found similar evi-
dence of discrimination. The cards of black hitters sold for 10 percent less than
the cards of comparable white hitters. The cards of black pitchers sold for 13
percent less than the cards of comparable white pitchers. These results suggest
customer discrimination among baseball fans.
women anticipated that they would be
working at age thirty-five, yet when this
group actually reached thirty-five, more
than 70 percent of them were in the labor
force. Their underestimation of future
work activity surely influenced their early
career preparations (or lack thereof).
More recent survey data show a dra-
matic change in expectations. The vast
majority of young women now report an
intention to work at age thirty-five.
Those changing work expectations
are reflected in rising female enrollments
in higher education. In 1960, women re-
ceived 35 percent of all bachelor’s de-
grees in the U.S.; by the 1980s, they
received somewhat more than half of
them. In 1968, women received 8 per-
cent of the medical degrees, 3 percent
of the MBAs, and 4 percent of the law
degrees granted that year. In 1986, they
received 31 percent of the medical de-
grees and MBAs and 39 percent of the
law degrees. This recent trend in school-
ing is likely to reinforce the rise in work
experience and contribute to continuing
increases in the relative earnings of
women workers. . . .
Despite the advances of the past
decade, women still earn less than men.
The hourly earnings of women were 74
percent of the earnings of men in 1992
when ages twenty-five to sixty-four are
considered, up from 62 percent in 1979.
At ages twenty-five to thirty-four, where
women’s skills have increased the most,
the ratio is 87 percent.
Economist Barbara Bergmann and
others attribute the pay gap to “wide-
spread, severe, ongoing discrimination by
employers and fellow workers.” But dis-
crimination cannot be directly measured.
Instead, researchers estimate the extent
to which differences in productivity ap-
pear to explain the gap and then attribute
the rest to discrimination. Such a conclu-
sion is premature, however, when pro-
ductivity differences are not accurately
measured, which is usually the case.
For example, data are seldom avail-
able on lifetime patterns of work experi-
ence, and even less material is available
on factors bearing on work expectations
and the intensity and nature of work in-
vestments. As these are still the key
sources of skill differences between men
and women, there is considerable room
for interpretation and disagreement.
When earnings comparisons are re-
stricted to men and women more similar
in their experience and life situations, the
measured earnings differentials are typi-
cally quite small. For example, among
people twenty-seven to thirty-three who
have never had a child, the earnings of
women in the National Longitudinal Sur-
vey of Youth are close to 98 percent of
men’s. . . .
It is true that women and men still do
not have the same earnings. But I believe
that the differential is largely due to con-
tinuing gender differences in the priority
placed on market work vs. family respon-
sibilities. Until family roles are more equal,
women are not likely to have the same
pattern of market work and earnings as
men. Technology has reduced the burden
of housework, but child care remains a
responsibility that is harder to shift to the
market.
S
OURCE
:
The Wall Street Journal,
October 7, 1994,
p. A10.

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4 3 2
PA R T S I X
T H E E C O N O M I C S O F L A B O R M A R K E T S
T H E D E B AT E O V E R C O M PA R A B L E W O R T H
Should engineers get paid more than librarians? This question is at the heart of the
debate over