Working Paper Revision

Lifetime Work Hours and the Evolution of the Gender Wage Gap

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.

Keywords: gender wage gap; selection bias; female labor force participation; on-the-job investment; human capital; market hours;

JEL Classification: J16; J22; J24; J31;

https://doi.org/10.20955/wp.2022.025

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2024-09-30

Number: 2022-025

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