Researchers disagree on the reasons for the observed wage differential between males and females in the United States. While some researchers attribute much of the wage differential to differences in endowments of productivity characteristics between the sexes, others attribute it to discrimination in the labor market. Most researchers who believe that differences in endowments of productivity characteristics explain a large part of the wage gap between the sexes do not completely discount the existence of discrimination in the labor market. Even though there is a general agreement that discrimination accounts for part of the male-female wage differential, the proportion of wage differential found to be attributable to discrimination in research work depends upon the method of decomposing the wage differential, and whether the researcher controls for occupational and industrial differences. Most estimates of the male-female wage differential have used the decomposition analysis popularized by Oaxaca [11] and Blinder [2]. This approach to decomposing the male-female wage differential assumes that in the absence of discrimination, the equilibrium wage equals either the male wage rate or the female wage rate depending on whether the male or female wage structure is used as the basis for decomposition of the wage differential. Unless this is true, the discrimination component of Oaxaca's approach to the decomposition of the wage differential is not consistent with Becker's [1] competitive market discrimination coefficient for labor of different productivities, defined as the difference between the observed wage ratio and the wage ratio that would prevail in the absence of discrimination. If females are paid less than the value of their marginal product and males are paid more than the value of their marginal product as a result of discrimination, elimination of discrimination will result in an equilibrium wage that is likely to be less than the male wage and greater than the female wage. Any decomposition analysis that uses either the female wage or the male wage as the reference wage will over- or underestimate the effects of discrimination in explaining the male-female wage differential. This has led Butler [3] to argue that it is impossible to