Sex and Income Inequality among the Employed

Abstract

Discrimination in the labor market has received considerable attention in the last two decades. Racial aspects have been a primary concern, but the question of discrimina tion against females has assumed an increasing importance. Despite statements of alleged discrimination against women, there is a paucity of empirical evidence. For the most part, the evidence cited—including that in governmental studies—is based upon comparisons of gross earnings by sex obtained from census studies or studies of particular industries. The pur pose of this study is to isolate pure measures of wage dis crimination on the basis of sex, within narrowly defined occupations. The measures are pure in that factors other than sex, to which wage differentials might be attributed, are taken into account. The results of the analysis of wages in four narrowly defined occupations clearly suggest that wage dis crimination has a sex dimension. A sex variable is con sistently powerful in explaining wage dispersion. Moreover, the estimated sex differentials generally exceed those related to color, often by considerable amounts. This finding poses obvious theoretical questions. If the wage for labor is deter mined under free market conditions, the continued existence of discrimination seems implausible in the absence of real differ ences in productivity among sex and color groups. This suggests that there are differences in the supply and demand curves relating to different groups of labor which arise out of subjective, rather than objective, factors.