Female Earnings Inequality: The Changing Role of Family Characteristics on the Extensive and Intensive Margins

David Card and Dean Hyslop

No 25387, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Although women make up nearly half the U.S. workforce, most studies of earnings inequality focus on men. This is at least in part because of the complexity of modeling both the decision to work (i.e., the extensive margin) and the level of earnings conditional on work (the intensive margin). In this paper we document a series of descriptive facts about female earnings inequality using data for three cohorts in the PSID. We show that inequality in annual earnings of women fell sharply between the late 1960s and the mid-1990s, with a particularly large decline in the extensive margin component. We then fit earnings-generating models that incorporate both intensive- and extensive-margin dynamics to data for the three cohorts. Our models suggest that over 80% of the decline in female earnings inequality can be attributed to a weakening of the link between family-based factors (including the number of children of different ages and the presence and incomes of partners) and the intensive and extensive margins of earnings determination.

JEL-codes: J22 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-dem, nep-lma and nep-ltv
Note: LS
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Published as David Card & Dean R. Hyslop, 2021. "Female Earnings Inequality: The Changing Role of Family Characteristics and Its Effect on the Extensive and Intensive Margins," Journal of Labor Economics, vol 39(S1), pages S59-S106.

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