Pharmacy and the Evolution of a Family-Friendly Occupation

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The ratio of female-to-male pharmacist earnings (median ...) grew from 0.66 in 1970 to 0.92 in 2010, representing [a] gender wage gap ... considerably smaller than in most other high-wage professions.

Some workers experience negative pressure on their earnings and job prospects when their respective industries and occupations undergo major technology and structural changes. But in The Most Egalitarian of All Professions: Pharmacy and the Evolution of a Family-Friendly Occupation (NBER Working Paper No. 18410 ), Claudia Goldin and Lawrence Katz find that the transformation of the pharmacy profession over the past half century, from one dominated by independent pharmacies to an industry overwhelmingly controlled by national pharmacy chains and hospitals, has made the occupation more family-friendly and female-friendly, with higher earnings and a lower gender earnings gap than other fields.

In the mid-1960s, only 8 percent of licensed pharmacists were female, and the industry was dominated by self-employed male pharmacists. About 40 percent of all pharmacists were self-employed, owning and working at independent pharmacies, and 70 percent of all pharmacists worked at independent pharmacies. Owners usually received a premium to compensate for the added risks, responsibilities, and workloads associated with being self-employed. The authors find that there was a hefty hourly earnings penalty for pharmacists who worked only part-time and part-year, such as women who tend to prefer flexible work hours, particularly during their child-rearing years.

In subsequent decades, the pharmacy profession changed as a result of an increase in nationwide chains. In addition, prescription drugs were increasingly produced by pharmaceutical companies, not compounded in pharmacies and hospitals. And, the demand for pharmaceuticals in general increased for a variety of reasons, including an aging U.S. population, expanded Medicare coverage of prescription drugs, and more readily available drugs to treat a host of chronic diseases.

To measure how much the pharmacy profession has changed over the years, the authors use data from a number of sources, including surveys by the Midwestern Pharmacy Research Consortium of thousands of licensed pharmacists in the years 2000, 2004, and 2009. They find that the changes within the pharmacy profession have been stark. The overall self-employment rate for pharmacists declined from 40 percent in the mid-1960s to less than 5 percent in 2010. Meanwhile, the demand for pharmacists has increased and the percentage of pharmacists working part-time has soared. By the 2000s, nearly 65 percent of all licensed pharmacists could be classified as non-managerial employees, mostly working at national chains and hospitals, with the majority of the remaining pharmacists serving as managers.

For female pharmacists, the changes have been dramatic. Today, about 55 percent of all pharmacists are women. The share of recent graduates of pharmacy programs who are female has risen from about 14 percent in the mid-1960s to 65 percent today. The earnings of all employed pharmacists, both male and female, have increased over the decades relative to other professions, rising by about 41 percent from 1999 through 2010, despite an increase in the supply of pharmacists entering the profession. Significantly, the ratio of female-to-male pharmacists' earnings (median, for full-time, full-year workers) grew from 0.66 in 1970 to 0.92 in 2010, representing the lowest gender wage gap within health care, and considerably smaller than in most other high-wage professions.

The authors don't attribute these dramatic changes to legislation, anti-discrimination policies, licensing requirements, or regulations specific to the pharmacy profession. Instead, they find that the changes are primarily due to structural transformation of the pharmacy profession's "compensation framework" over the decades, including the decline of earnings premiums flowing to self-employed pharmacists and the reduction of implicit earnings penalties for those who work part-time and part-year. Both of these developments generally have worked in favor of women. Pharmacists also are good substitutes for each other, which leads to more flexibility in work hours and scheduling than in many other professions.

-- Jay Fitzgerald