Changing Levels or Changing Slopes? The Narrowing of the Gender Earnings Gap 1959 – 1999

Once educational attainment and other observable characteristics have been controlled for, studies show that the gender wage gap among adult full-time workers is about half the size it was in 1980. Using U.S. Census and Current Population Survey (CPS) data from 1959 through 1999, the authors investigate the extent to which the decline in this gap was associated with changes across cohorts in the relative rate of wage growth after labor market entry (slopes), versus changes in relative earnings levels at labor market entry (levels). They find that slope changes associated with post-schooling investments, including work experience, account for no more than one-third of the narrowing of the gender wage gap over the past 40 years. The majority of the narrowing can be attributed to factors present at the time that successive cohorts entered the labor market, such as a growing demand for women's unobserved skills or declining discrimination.