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The Dynamics of Gender Earnings Differentials: Evidence from Establishment Data

Erling Barth, Sari Pekkala Kerr, Claudia Olivetti

NBER Working Paper No. 23381
Issued in May 2017, Revised in July 2019
NBER Program(s):The Labor Studies Program

Despite dramatic workforce gains by women in recent decades, a substantial gender earnings gap persists and widens over the course of men’s and women’s careers. Since there are earnings differences across establishments, a key question is the extent to which the widening of the gender pay gap over time arises from differences in career advances within the same establishment versus differential gains from job-to-job moves across establishments. Using a unique match between the 2000 Decennial Census of the United States and the Longitudinal Employer Household Dynamics (LEHD) data, we find that both channels are important and affect workers differently by education. For the college-educated the increasing gap is for the most part due to differential earnings growth within establishment. The between-establishment component explains only 27 percent of the widening of the total gender pay gap for this group. For workers without college degree, the establishment component is the main driver of the, relatively small, widening of the gender earnings gap. For both education groups, marriage plays a crucial role in the establishment component of the increasing earnings gap.

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Document Object Identifier (DOI): 10.3386/w23381

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