When Women Out-Earn Men

By Jaison R. Abel and Richard Deitz. Both are with the New York Fed. Excerpts:

"We often hear that women earn “77 cents on the dollar” compared with men. However, the gender pay gap among recent college graduates is actually much smaller than this figure suggests. We estimate that among recent college graduates, women earn roughly 97 cents on the dollar compared with men who have the same college major and perform the same jobs. Moreover, what may be surprising is that at the start of their careers, women actually out-earn men by a substantial margin for a number of college majors. However, our analysis shows that as workers approach mid-career, the wage premium that young women enjoy in these majors completely disappears, and males earn a more substantial premium in nearly every major."

"we use regression analysis to compare the full-time annual wages of men and women with equivalent amounts and types of human capital (for example, those with a bachelor’s degree, controlling for age and college major). Further, we compare men and women who are performing the same jobs (we account for nearly 500 different occupations across nineteen industries), and use a number of demographic controls (for example, race and broad geographic location). The results of our analysis indicate that among recent college graduates, men earn about 3 percent more than women overall. It is important to keep in mind that because the wage gap we estimate holds jobs constant, this premium is not owing to men and women performing different jobs,"

"this pay gap varies considerably by major, ranging from a 21 percent male wage premium for agriculture majors to a 16 percent female wage premium for social services majors."


"newly minted female college graduates earn as much as, or more than, men in twenty-nine of the seventy-three majors. Young women earn particularly high wage premiums if they majored in engineering, treatment therapy, art history, construction services, or business analytics."

"we estimate the gender pay gap for college graduates aged 35 to 45. For this mid-career group, we find that men earn about 15 percent more than women, much larger than the 3 percent figure we found for recent college graduates. When we estimate the gender pay gap by major for the mid-career group, the advantage completely disappears in the majors where we found younger women earned more than younger men, and the male wage premium widens substantially across nearly every major."

"First, to the extent that male earnings premiums represent discrimination against women, it is possible that such discrimination becomes more widespread as men and women approach mid-career. Another possibility is that pay differences arise for reasons related to raising a family. When we look at the outcomes of young college graduates, this group primarily contains single people without children, while the mid-career group includes a significant number of men and women with children. Women are more likely than men to spend time out of the labor force to bear and raise children. This interruption in a working career reduces the accumulation of work experience and human capital, which has been shown to have a negative influence on earnings. In addition, some jobs tend to reward long hours and fixed schedules—think surgeons or lawyers. Because raising a family often requires more flexible schedules, those with family responsibilities who have difficulty satisfying time sensitive work demands may face lower wages in these types of jobs. In fact, in jobs where such time demands are largely absent, and more flexibility is possible, the pay gap has been found to be much smaller."