Why do “Women’s jobs” have low pay for their educational level?

Abstract

Jobs held largely by women have low pay for the amount of education they require. Why is this? One hypothesis is that employers prefer to hire men, and all workers prefer better jobs, so that women can get in only when a job's rewards (relative to its skill requirements) are low enough that men no longer want the job. Thus, wages affect sex composition. Others see the causal arrow to run the other way. In this view, the sex composition of jobs affects the wage that employers offer; employers' biased perceptions lead them to see jobs as less important and less payworthy if they are filled largely by women. These explanations are not mutually exclusive; the causal arrow may run both ways (or neither way). In this paper we use CPS data from 1984 to 1991 and a cross-lag panel model to examine these effects. Jobs are defined with a detailed occupational category within a specific broad industry category. We find that jobs with a higher percentage of females at one point have slower wage growth (or steeper wage decline) for both men and women in the ensuing years. But we find no effect of earlier wage rate on later sex composition. For those interested in reducing gender inequality in earnings, these findings suggest the utility of “comparable worth” policies.