Economic Inequality
Inequality caused by education, gender, race and family background
a. Categorical inequality
b. Inherited inequality
Categorical inequality
Categorical inequality: Economic differences among people who are treated as
different categories (i.e. gender and schooling)
Gender wage gap:
Why do female workers get paid less than male workers?
,The Gender Gap: Key questions
● What is the ratio of female undergraduate economics majors today? How has
this changed since 1990s?
● What is the gender wage ratio today? In 1960?
● What is the most important observed factor explaining changes over the last 50
years? (Education, experience, occupation/industry choice)
The Grand Gender Convergence
1. In 1950, women comprised less than 33 percent of US employees; today this
number is almost percent
2. In 1960, women earned around 60 percent of what men did; today this number is
around 80 percent (Blau and Kahn 2014)
3. In 1960, men earned the majority of all college degrees; today women do
(DiPrete and Buchman 2013)
Less Progress
1. The gender wage gap (which favored women) has shrunk for a decade (Hout,
2016)
2. Gender pay gaps at the top remain large
3. Women make up less than 10% of corporate boards and less than 2% of CEOs
(Matsa, 2011)
4. % of women earn physical science, engineering, or economics majors have
barely changed in 20 years
5. American women report being less happy today than they were 50 years ago.
Gender Disparity in Economics Major
1. Economics has grown as a popular major for men and women, but the
male-to-female ratio of econ majors has stayed nearly constant for the past 20
years
2. Three men for everyone one woman economics major in the US (2:1 at elite
institutions; 2:6:1 at top liberal arts colleges)
,Gender Disparity in Economics Major
Male/Female Econ Majors (2.3:1)
Gender Earnings Ratios for Full-Time Workers, 1955-2014
, Explanations for the gender wage gap
1. How much of the earnings gap is “explained by” differences in experience and
education years that men and women have?
2. How much of the earnings gap is left over (i.e., cannot be “explained” by
differences in experience)?
- Occupation/Industry segregation?
- Employers’ discrimination?
- Something else? (maybe motherhood penalty, worker preferences,
compensating differentials, etc)
Explanations for the gender wage gap
1st reason: Difference in experiences by gender
Findings: Experience gap explained around 25% of wage differences in 1980 and 15%
in 2010 (Blau and Kagn, 2015)
→ What about other factors?
Inequality caused by education, gender, race and family background
a. Categorical inequality
b. Inherited inequality
Categorical inequality
Categorical inequality: Economic differences among people who are treated as
different categories (i.e. gender and schooling)
Gender wage gap:
Why do female workers get paid less than male workers?
,The Gender Gap: Key questions
● What is the ratio of female undergraduate economics majors today? How has
this changed since 1990s?
● What is the gender wage ratio today? In 1960?
● What is the most important observed factor explaining changes over the last 50
years? (Education, experience, occupation/industry choice)
The Grand Gender Convergence
1. In 1950, women comprised less than 33 percent of US employees; today this
number is almost percent
2. In 1960, women earned around 60 percent of what men did; today this number is
around 80 percent (Blau and Kahn 2014)
3. In 1960, men earned the majority of all college degrees; today women do
(DiPrete and Buchman 2013)
Less Progress
1. The gender wage gap (which favored women) has shrunk for a decade (Hout,
2016)
2. Gender pay gaps at the top remain large
3. Women make up less than 10% of corporate boards and less than 2% of CEOs
(Matsa, 2011)
4. % of women earn physical science, engineering, or economics majors have
barely changed in 20 years
5. American women report being less happy today than they were 50 years ago.
Gender Disparity in Economics Major
1. Economics has grown as a popular major for men and women, but the
male-to-female ratio of econ majors has stayed nearly constant for the past 20
years
2. Three men for everyone one woman economics major in the US (2:1 at elite
institutions; 2:6:1 at top liberal arts colleges)
,Gender Disparity in Economics Major
Male/Female Econ Majors (2.3:1)
Gender Earnings Ratios for Full-Time Workers, 1955-2014
, Explanations for the gender wage gap
1. How much of the earnings gap is “explained by” differences in experience and
education years that men and women have?
2. How much of the earnings gap is left over (i.e., cannot be “explained” by
differences in experience)?
- Occupation/Industry segregation?
- Employers’ discrimination?
- Something else? (maybe motherhood penalty, worker preferences,
compensating differentials, etc)
Explanations for the gender wage gap
1st reason: Difference in experiences by gender
Findings: Experience gap explained around 25% of wage differences in 1980 and 15%
in 2010 (Blau and Kagn, 2015)
→ What about other factors?
