Revealing the Concealed Effect of Top Earnings on the Gender Gap in the Economic Value of Higher Education in the United States, 1980–2017

Abstract

The expansion of women's educational attainment may seem to be a promising path toward achieving economic equality between men and women, given the consistent rise in the economic value of higher education. Using yearly data from 1980 to 2017, we provide an updated and comprehensive examination of the gender gap in education premiums, showing that it is not as promising as it could and should be. Women receive lower rewards to their higher education across the entire wage distribution, and this gender gap increases at the very top education premiums—the top quarter and, even more so, the top decile. Moreover, insufficient theoretical and methodological attention to this top premium effect has left gender inequality concealed in the extensive empirical studies on the topic. Specifically, when we artificially censor the top at the 80th wage percentile, the gender gaps in education premium reverse. Lastly, the growth in earnings inequality in the United States, which is greatly affected by the expansion of top earnings, is associated with the growing gender gap in education premiums over time. We discuss the meaning and implications of this structural disadvantage at a time when women's educational advantage keeps growing and higher education remains the most important factor for economic attainment.

Higher education and high-wage gender inequality

“…Scholars have argued that persistence of the high-wage earnings gap is at least partly a result of broader changes in inequality dynamics, wherein increases in top earnings have far outpaced increases in earnings lower in the wage distribution ( Autor 2014 ; Blau and Kahn 2017 ; Piketty et al 2018 ). This research suggests that men are the primary beneficiaries of recent high-wage earnings gains, thus helping maintain the overall gender wage gap ( Mandel and Rotman 2021 ).…”

“…High-wage gender inequality also has been linked to gender gaps in college premiums, in the sense that economic returns to a college degree among the top 10 percent of earners have grown faster for men than for women ( Mandel and Rotman 2021 ). Together with the fact that high earners are disproportionately college graduates ( Goldin and Katz 2008 ), better understanding the stagnating wage gap among the highest earners involves explicitly examining the role of educational processes.…”

“…In this article, we assess the extent to which gender differences in field of study and advanced degrees explain the persistent gender wage gap among high-earning college-educated workers. This question is important for understanding the mechanisms that contribute to wage inequality dynamics among those with college degrees; while recent research has documented the rise of top-end gender inequality among college workers ( Mandel and Rotman 2021 ), less is known about mechanisms specific to higher education and how they may be contributing to these trends. This question also is key to assessing whether women are able to “overcome” existing wage inequality by altering the characteristics of their educational attainment.…”

Is the Gender Wage Gap Really a Family Wage Gap in Disguise?

“…In accounting for the gender wage gap, researchers often focus on gender differences in the distribution of and returns to human capital (as measured by education or labor force experience), occupation, job and labor force attributes, and other structural predictors of the gender pay gap (Blau and Kahn 1997, 2006, 2017; Cha and Weeden 2014; Cortés and Pan 2019; Goldin and Katz 2007; Mandel and Rottman 2021; Mandel and Semyonov 2014). In the United States, gender differences in human capital account for a relatively modest share of the gender wage gap.…”

“…Despite widespread recognition that family wage gaps are consequential for the gender wage gap, the two phenomena are typically analyzed separately and with very different goals and analytic strategies. At the risk of oversimplification, most research on the gender wage gap focuses on identifying its individual and structural correlates and how these correlates vary across time and place (e.g., Blau and Kahn 2017; Cha and Weeden 2014; Goldin 2014; Mandel and Rotman 2021). Most research on family wage gaps, by contrast, focuses on identifying the causal effects of marital or parental status on wages among workers of the same gender (e.g., Budig and England 2001; Cheng 2016; England et al 2016; Killewald 2013).…”