Gender Gap Narrows Despite Higher Income Inequality

WOMEN in the United States are closing the wage gap with men.

"We have made progress," says Francine Blau, a University of Illinois economist. "But I am not advocating complacency."

Women working full time, on average got paid in 1988 about 69 percent of the weekly wage of men, up from 58 percent in 1971 and 62 percent in 1981.

Another set of statistics indicates that younger women are doing better. In 1990, women aged 25 to 34 and working year-round, full time received on average 79 percent of the wage of men in the same age bracket. For women aged 35 to 44, it is 69 percent and for those 45 and over, 62 percent.

More women are moving into management and the professions. Professor Blau doesn't like the popular term, the "glass ceiling" for female executives, because it implies a rigid obstacle blocking promotion to top corporate positions. Movement up the ladder may be harder for women, but it can be done, she says.

But why does the pay gap remain when the law bans gender discrimination and many executives consciously attempt to advance women in the corporate hierarchy?

About half the gap, Blau says, can be explained through statistical analysis. Statistics show that since women are more likely than men to take time out of their careers to raise children, they have less work experience. Women tend to work in occupations and industries that are not unionized and often pay less.

The other half of the gap isn't so easily explained. Part of it is simply discrimination, Blau says. But there may be other factors accounting for the gap - perhaps in education - that are harder to measure. On average, women have about the same number of years of schooling as men. Females are more likely to graduate from high school than males. In recent years, a slightly higher proportion of women are getting undergraduate degrees than men. However, Blau notes that fewer women go on to postgraduate deg rees. And they may be crowding into fields of study that pay less on graduation.

Oddly, the gender gap is bigger in the US than in most industrialized countries.

Yet, American women have greater labor force participation and occupational status than women in 10 other industrial countries (other than Sweden) examined by Blau and Lawrence Kahn, another economist at the University of Illinois, in a recent National Bureau of Economic Research paper. They are less segregated into traditional female occupations. Moreover, the US has had a longer and often stronger commitment to equal pay and equal employment opportunity policies than have most of the other countries.

Nonetheless, six countries (Sweden, Norway, Australia, Austria, Italy, and Germany) have better gender earnings ratios then the US, and only three (Britain, Hungary, and Switzerland) do less well.

The explanation for the larger US gap, the authors hold, is the greater wage inequality for both men and women in the US than in the other countries. Because of children and other family concerns, women fall behind men in work experience, training, and promotions. These lower levels of labor skills are penalized in the US wage structure to a greater degree than in other countries because of the wider wage distribution.

During the 1971-1988 period, wage inequality overall grew decidedly in the US. Though women's relative skills and treatment improved in these years, the growing inequality retarded the growth in women's relative wages in this time period by about one-quarter, Blau and Professor Kahn estimate. Considering this factor, the decline in the US gender gap in the 1980s "becomes all the more impressive," they write.

The US gender gap would be similar to that in countries like Sweden, Italy, and Australia (the countries with the smallest gaps) if the US had their level of wage inequality.

These countries have labor market institutions that reduce the gender gap. In Sweden, for example, the great majority of workers are unionized and collective bargaining and wage setting are centralized. The major union federation signs an agreement with the employers federation covering a major portion of the labor force.

In the US, the pay-setting mechanism is far less unionized and centralized. Wages are mostly decided at the single-firm level. The government does not intervene to boost women's pay unless there is discrimination.