Narrowing Gender Wage Gap Linked to Ability of Women

by Rajashri on Aug 13 2008 3:34 PM

The apparent narrowing of wage gap between working men and women is due to "highly able" females entering the workforce, and not how much they're being paid, according to economists at the Brown University.

Researchers Yona Rubinstein and Casey Mulligan from University of Chicago suggest that the impression that the labour market treats women better today than three decades ago is a "statistical illusion."

"Though decades of economic research suggest men and women are equalizing in the labour market, the notion that today's working women are being paid more and treated better than ever before is simply wrong," said Rubinstein, assistant professor of economics.

"The growing equality between genders reflects the entry of the most able women to the workforce rather than better pay.

"While there may be more women holding high-power positions today, they are still being paid as their counterparts were three decades ago," Rubinstein added.

After years of a rather constant gender wage gap in the United States, women's wages grew from the late 1970s to the mid 1990s, and the gap seemed to narrow.

Rubinstein said that in the 1970s, the labour market had an increased demand for "skilled workers."

As most of the "skilled men" were already in the workforce, the demand led to the entry smart, skilled, and "highly able" women- who were earlier staying at home.

The findings are published in the August issue of The Quarterly Journal of Economics.