SMU SOE Seminar Series (November 26, 2024): Decomposing Trends in the Gender Gap for Highly Educated Workers

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ABSTRACT

This paper examines the gender gap among full-time, college-educated workers born between 1931 and 1984. Using data from the National Survey of College Graduates and other sources, we decompose the gender earnings gap across birth cohorts into three components: (i) gender differences in the relative returns to undergraduate and graduate fields, (ii) gender-specific trends in undergraduate field, graduate degree attainment, and graduate field, and (iii) a cohort-specific "residual component" that shifts the gender gap uniformly across all college graduates. We find three main results. First, much of the convergence in earnings between the 1931 and 1950 cohorts is due to a declining "residual component." The residual component remains stable for cohorts born from 1951 to the late 1970s, after which it continues to decline. Second, while gender differences in the relative returns to undergraduate and graduate fields of study contribute to the earnings gap, they play a limited role in explaining its decline over time. Third, when holding the relative returns to fields constant, changes in fields of study significantly contribute to the decline in the gender gap. However, this decline is offset by cohort trends in the relative returns to specific fields that favored men over women, reducing the contribution of field-of-study changes to the decline.

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