Occupational sex segregation and the earnings of occupations: What causes the link among college-educated workers?

Abstract

A significant proportion of the earnings gap between men and women is attributable to occupational sex segregation and the concentration of women in relatively low-paying occupations, but we do not yet know why women continue to be employed disproportionately in lesser-paying occupations. I attempt to explain the sex gap in the relationship between average occupational earnings and occupational attainment by modeling occupational placement among a nationally representative sample of college-educated new labor force entrants. I test empirical predictions derived from supply- and demand-side theories of occupational sex segregation using a conditional logit model, strong controls for human capital investments, and a set of occupational characteristic measures that extends beyond those used in previous research. The results of this analysis show that sex differences in college major explain 11–17% of the sex gap in the likelihood of employment in relatively high-paying occupations. However, even among recent labor force entrants who have very similar human capital investments, i.e., college graduates with the same majors, women and men enter different types of occupations. The sex differences in the distribution of workers across occupational characteristics, coupled with the differential remuneration of the influential characteristics explains an additional 41% of the sex gap in the attainment of relatively lucrative occupational placement.

Introduction

In 2002, the female-to-male ratio of earnings was 0.778 among all workers over 25 years old, and among college-educated workers women earned only 74.3 cents for every dollar earned by men (Statistics, 2003). We know that a significant proportion of this sex gap is attributable to occupational sex segregation and the concentration of women in relatively low-paying occupations (Treiman and Hartmann, 1981).¹ But, despite a rich body of research, we do not understand the causes of this continued sex gap in occupational attainment. The “ghettoization” of women in low-paying occupations persists despite the emergence of a female advantage in bachelor’s degree attainment, sex equity in the attainment of master’s and professional degrees (Bae et al., 2000), and growing gender equity in labor force participation and attachment (Bianchi, 1995, Reskin and Padavic, 1994). This economic dimension of occupational sex segregation is particularly puzzling given women’s advantage over men in the attainment of occupational status as measured by occupational education (Hauser and Warren, 1997, Warren et al., 1998), and the growing tendency for young women to attach as much importance as do young men to the extrinsic rewards of work (Marini et al., 1996).

Why do women continue to be employed disproportionately in lesser-paying occupations? We do not yet have a satisfactory answer to this question partly because prior research has been limited in several ways. First, previous research has not distinguished the relative contributions of educational and labor market processes, as it has not adequately controlled for the influence of gender segregation that occurs prior to labor market entry. Second, within- and between-occupation influences on the sex gap in earnings are often conflated as existing analyses typically model individual-level earnings with inadequate controls for occupation-level determinants. Third, previous studies have not identified how occupational characteristics are leveraged against one another in the face of actual choices and constraints since they include only limited sets of occupations and measures of the occupational characteristics. Furthermore, most previous research has focused on explaining the association between occupational gender composition and pay (England et al., 1994, England et al., 2000, Petersen and Morgan, 1995, Tam, 1997, Tomaskovic-Devey and Skaggs, 2002), rather than on the association between gender and occupational allocation (Reskin, 1993, Tomaskovic-Devey and Skaggs, 2002).

The research reported here addresses some of these limitations and aims to identify the link between sex-segregated occupational allocation and the earnings of occupations. I attempt to explain why the relationship between average occupational earnings and occupational attainment is less positive for women than it is for men by modeling occupational placement among a nationally representative sample of college-educated new labor force entrants drawn from the 1993 National Survey of College Graduates (NSCG). Using a conditional logit model and a detailed classification of occupation, I first estimate the marginal sex difference in the association between occupational attainment and average occupational earnings. I then attempt to statistically account for the relationship by introducing to the model a strong control for human capital investments and a set of measures of occupational characteristics predicted by supply- and demand-side explanations to affect both the gendered allocation of workers and the valuation of occupations. Finally, I use a decomposition analysis to estimate the relative explanatory power of each factor that is hypothesized to explain why women are segregated into relatively low-paying occupations.