Women's Economic Progress and Inequality

Linda Wong

No 477, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: This paper explores links between women's economic progress and widening inter-industry wage differentials. Each phenomenon arises because of technological change that has favored young women's human capital, in what is called sex-biased technological change. Such technological change helps lower the costs of women of bringing their abilities to the market, enabling more of them to gravitate to the high-tech sector, shifting the relative skill supply. Our theory can simultaneously rationalize the facts on increasing female wages and their participation in the high-tech sector, wage premium favoring the high-tech sector, and female to male wage ratios. Our theory also predicts an amplification of the selection effect on gender difference in productivity in the high-tech sector. We use workers' skill indexes given by the Dictionary of Occupational Titles to determine technology sectors. Results based on state-level data indicate the elasticity of substitution between high and low-skill workers is around 2. We provide evidence in favor of sector participation and wage patterns predicted by our model. The allocative impact of sex-biased technological change is 8 to 10 times larger than the wage effect. The results are robust for all measures of patent innovation.

Keywords: sector choice; directed technological change; gender wage gap (search for similar items in EconPapers)
JEL-codes: J11 O11 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:477

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