Labor Force Participation Over the Life Course: The Long-Term Effects of Employment Trajectories on Wages and the Gendered Payoff to Employment

Abstract

Abstract In this article, we consider how individuals’ long-term employment trajectories relate to wage inequality and the gender wage gap in the United States. Using more than 30 years of data from the National Longitudinal Survey of Youth 1979 sample, we identify six employment trajectories for individuals from ages 22 to 50. We find that women across racial/ethnic groups and Black men are more likely than White and Hispanic men to have nonsteady employment trajectories and lower levels of employment throughout their lives, and individuals who have experienced poverty also have heightened risks of intermittent employment. We then assess how trajectories are associated with wages later in careers, at ages 45–50. We find significant variation in wages across work trajectories, with steady high employment leading to the highest wages. This wage variation is primarily explained by work characteristics rather than family characteristics. Finally, we examine gender variation in within-trajectory wages. We find that the gender wage gap is largest in the steady high employment trajectory and is reduced among trajectories with longer durations of nonemployment. Thus, although women are relatively more concentrated in nonsteady trajectories than are men, men who do follow nonsteady wage trajectories incur smaller wage premiums than men in steady high employment pathways, on average. These findings demonstrate that long-term employment paths are important predictors of economic and gender wage inequality.