Women today are entering the work force and earning at near parity with men – in some careers even out-earning their male counterparts. By mid-career, though, it seems that all changes.
A new analysis from the Federal Reserve Bank of New York examines the gender wage gap in the early careers of college graduates following the Great Recession, and how the wage gap shifts as workers approach the middle of their career.
It’s often argued that women earn 77 cents for every dollar a man earns.
Looking at data for the years 2009 through 2013 from the U.S. Census Bureau’s American Community Survey, economists Jaison R. Abel and Richard Deitz analyze the salaries of workers ages of 22 to 27 with at least a bachelor’s degree.
What they find is that women earn roughly 97 cents on the dollar compared with men who had the same college major and perform the same job.
“We compare men and women who are performing the same jobs (we account for nearly 500 different occupations across nineteen industries), and use a number of demographic controls (for example, race and broad geographic location),” write Abel, an officer in the New York Fed’s Research and Statistics Group, and Deitz, an assistant vice president in the NY Fed’s Research and Statistics Group. “The results of our analysis indicate that among recent college graduates, men earn about 3% more than women overall.”
Women even out-earn men in a number of careers – like social services, treatment therapy and many engineering roles.
“This pay gap varies considerably by major, ranging from a 21% male wage premium for agriculture majors to a 16% female wage premium for social services majors,” the pair write.
Newly minted female college graduates earn as much as, or more than, men in 29 of the 73 majors the pair looked at.
“Young women earn particularly high wage premiums if they majored in engineering, treatment therapy, art history, construction services, or business analytics,” according to Abel and Deitz. “At the other end of the spectrum, men tend to earn more than women by the widest margin if they majored in agriculture, animal and plant sciences, general social sciences, or early childhood education.”
By mid-career, though, that all changes.
Abel and Dietz also looked at college graduates age 35 to 45. They found that men in that age group earn about 15% more than their female counterparts.
The analysis also shows that as workers approach mid-career, the wage advantage completely disappears in the majors where younger women earned more than younger men.
“Take social services majors, for example: the 16% female wage premium among recent grads turns into a 10% male wage premium at mid-career, a whopping change of more than 25 percentage points,” according to Abel and Dietz.
Why does the gender wage gap widen as workers move through their careers?
Abel and Deitz have a few ideas.
One possibility: Pay differences arise for reasons related to raising a family.
Whereas the young college grads are primarily single without children, Abel and Deitz point out that the mid-career group includes a significant number of men and women with children.
“Women are more likely than men to spend time out of the labor force to bear and raise children,” the pair write. “This interruption in a working career reduces the accumulation of work experience and human capital, which has been shown to have a negative influence on earnings.”
Another possibility: Some jobs, like surgeons or lawyers, reward long hours and fixed schedules.
“Because raising a family often requires more flexible schedules, those with family responsibilities who have difficulty satisfying time-sensitive work demands may face lower wages in these types of jobs,” the pair write.
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