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Lifetime Work Hours and the Evolution of the Gender Wage Gap

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  • Oksana Leukhina
  • Guillaume Vandenbroucke

Abstract

The gender wage gap expanded from 1940 and 1975 but narrowed sharply from 1980 to 1995. We use the model introduced in Ben-Porath (1967) to assess the role of gender differences in life cycle profiles of market time in explaining the gender wage gap dynamics over the long run. Men’s profiles changed little across cohorts, but women’s profiles converged to those of men, and especially so in higher-paying occupations. We calibrate the model and find that the implied trends in unobserved investment in human capital accumulation account for most of the long run gender wage gap dynamics. The most notable effect of changing market hours was to reduce investment incentives for men in lower-paying occupations and to increase them for women in higher-paying occupations. The roles of changing occupation-specific skill prices and cohort-specific endowments are less pronounced.

Suggested Citation

  • Oksana Leukhina & Guillaume Vandenbroucke, 2022. "Lifetime Work Hours and the Evolution of the Gender Wage Gap," Working Papers 2022-025, Federal Reserve Bank of St. Louis, revised 30 Sep 2024.
    • Handle: RePEc:fip:fedlwp:94804
    DOI: 10.20955/wp.2022.025
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    References listed on IDEAS

    as
    1. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-1552, September.
    2. Mark Huggett & Gustavo Ventura & Amir Yaron, 2011. "Sources of Lifetime Inequality," American Economic Review, American Economic Association, vol. 101(7), pages 2923-2954, December.
    3. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
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    More about this item

    Keywords

    gender wage gap; selection bias; female labor force participation; on-the-job investment; human capital; market hours;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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