Occupational sex-segregation, specialized human capital and wages: evidence from Britain

Abstract

Female-dominated occupations are poorly paid, but there is disagreement about why. Sociological explanations argue that pay in such occupations is low because society undervalues ‘women’s work’, while economic theory argues that this is due to scant requirements for specialized skills. This article sheds light over these debates by examining the impact of occupational feminization on wages in Britain and exploring the mechanisms that produce it, using innovative statistical models that account for both observable and unobservable skill. Results confirm that occupational sex-segregation explains a sizeable portion of the gender wage gap and that wages in female-dominated occupations are lower than wages in other occupations. Inconsistent with human capital theory, low pay in female-dominated occupations cannot be explained fully by low skill specialization or by observable or unobservable characteristics of their workers. Remaining wage penalties in such occupations are consequently taken as evidence of institutional devaluation of ‘women’s work’.