Lifetime Work Hours and the Evolution of the Gender Wage Gap

Leukhina, Oksana; Vandenbroucke, Guillaume

doi:10.20955/wp.2022.025

Working Paper Revision

Lifetime Work Hours and the Evolution of the Gender Wage Gap

Abstract: The gender wage gap expanded between 1940 and 1975 but narrowed sharply between 1980 and 1995. We use a human capital accumulation model introduced in Ben-Porath (1967) to assess the role of gender differences in life-cycle profiles of market time and occupation sorting in explaining the gender wage gap dynamics over the long run. Men’s aggregate hours 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 to wage data by age, year, gender and occupation, and find that changing time allocation patterns induced human capital investments that account for nearly all of the gender wage gap dynamics. Occupation-specific human capital rental rates played a small role in helping close the gender gap since 1980. The roles of cohort-specific endowments, however, were 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