A Longitudinal Analysis of White Women's Wages

Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. University of Wisconsin Press andThe Board of Regents of the University of Wisconsin System are collaborating with JSTOR to digitize, preserve and extend access to The Journal of Human Resources. ABSTRACTAccording to human capital theory, women's work participation decisions will strongly affect their wages and wage growth. We test human capital predictions about how labor force withdrawals, both past and prospective, part-time work experience, and working in "male" rather than in "female" jobs affect wages and wage growth for white women. We do this by estimating a wage change model for the years 1967-1979 for a national sample of white women. We find that wages drop immediately following withdrawals, but that this is followed by a rapid wage growth so that the net loss in wages from dropping out of the labor force is small. We further find that wage growth is not significantly lower in "female" than in "male" jobs, but that part-time work experience does not lead to significant wage growth, in either "male" or "female" jobs.Women's decisions about labor force participation often are shaped by the conflicting demands of market versus home work. Even women who are currently childless may make career choices based on the assumption that they will eventually raise a family. These decisions, in turn, have implications for women's labor market earnings and for our understanding of the sex-based wage gap.Employers have long claimed that a major cause of women's low wages is the fact that they work fewer years and less intensively than men Corcoran and Duncan are University of Michigan faculty members and are Senior Study 498 | THE JOURNAL OF HUMAN RESOURCES do (Oppenheimer [17]). In the last decade economists have developed a set of theoretical models that spell out the ways in which women's decisions about work participation, both past and prospective, can affect their wages. However, despite extensive empirical work on the relationship between women's work behavior and wages, there still remains considerable controversy over the ways in which aspects of work participation affect the level and growth of wages, the size of these effects, and the extent to which sex differences in work participation patterns account for sex differences in earnings. In this article, we investigate how labor supply decisions influence women's wages and wage growth. We examine the wage depreciation associated with labor force withdrawals (Mincer and Polachek [13]), the wage "rebound" that accompanies a return to the labor force (Mincer and Ofek [12]), the differences in wage growth associated with part-and full-time work (Corcoran and Duncan [4]), Jones and Long [10]), the differences in wage growth that ...

Mind the gap? Estimating the effects of postponing higher education

“…Heckman et al (2003) offer a more critical assessment. 6 In addition to the references above, the literature on work interruptions and their effects on wages include, among many other contributions, Baum (2002), Corcoran and Duncan (1979), Mincer and Ofek (1982), Corcoran et al (1983) and Gronau (1988). Swedish evidence concerning the effects of work interruptions due to parental leave is given in Stafford and Sundström (1996) and Albrecht et al (1999 In summary, there is overwhelming evidence that life cycle events concerning work and education are key determinants of individual earnings.…”

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“…By now, numerous studies adopted this approach to assess the effect of work interruptions. Examples include Albrecht et al, 1999;Baum, 2002;Corcoran and Duncan, 1979;Corcoran et al, 1983;Pitts, 2003, 2005;Jacobsen and Levin, 1995;Light andUreta, 1990, 1995;Mincer and Ofek, 1982;Mincer and Polachek, 1974;Phipps, Burton and Lethbridge, 2001;Rummery, 1992;Sandell and Shapiro, 1980;Sen, 2001;Stafford and Sundstrom, 1996;Stratton, 1995. As already illustrated, the life-cycle human capital model links expected lifetime labor force participation to one's incentive to make marketable human capital investments. The lower the expected lifetime work, the smaller the gains from human capital investment, the lower the amount invested, and finally the lower one's wage.…”

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“…The intermittent worker's decision whether and when to invest in their human capital will depend jointly on the relative sizes of the depreciation and restoration effects and the probability of their returning to work. Corcoran et al (1983) suggest that 'restoration' is not explained by the higher efficiency of reconstruction of occupational skills instead of building new skills as Mincer and Ofek suggest, but by the matching process on the labour market. Both employers and employees who seek jobs after a career break find a match in which the initial wage is low but improves considerably when the match appears successful.…”