The dynamics of gender earnings differentials: Evidence from establishment data

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 whether the widening of the gender pay gap arises from differences in career advances within the same establishment or from differential gains from job-to-job moves across establishments. Using a unique match between the 200 0 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 establishment component explains only 27% 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. (c) 2021ElsevierB.V. Allrightsreserved.

Automated summary

Despite significant workforce gains by women in recent decades, a gender earnings gap still exists and widens over the course of men's and women's careers. Research shows that for college-educated workers, the increasing gap is mainly due to differential earnings growth within the same establishment, while for workers without a college degree, it is mainly driven by differences in earnings across establishments. Marriage also plays a crucial role in the widening of the gender earnings gap through establishment components for both education groups.