Gender Inequality: Sorting Out the Effects of Race/Ethnicity and Gender in the Anglo Male-Latino Female Earnings Gap

Abstract

One of the most significant features of the U.S. economy in the 20th Century is the persistent earnings gap between men and women. The gap in earnings between Anglo men and women of color has also been an enduring featue of the U.S. labor market. Since 1949, the earnings gap between Latino women and Anglo men has remained virtually the same (53%–55%), even though Latinos have steadily increased their labor force participation at a faster rate than any other female group. While this form of gender inequality has received considerable attention, only a few studies have focused on the earnings of Latino women. This exploratory study tests the ability of a human capital model to explain earnings inequalities between Latino women (Mexican-American, Puerto Rican, and Cuban) and Anglo men. Using regression decomposition analyses, we also examine how the factors of race/ethnicity and gender affect the earnings differences between men and women. Our findings indicate that the human capital model accounts for less than 25% of the earnings difference between our male and female groups. When we control for the net effect of ethnicity holding gender constant, we find that the human capital model accounts for 83% of the earnings difference between Anglo women and racial/ethnic women, suggesting that gender is an important predictor in explaining the earnings gap. Given these results, we offer other possible explanations (e.g., economic restructuring) for the persistence of the inequality of earnings between Latino women and Anglo men. We conclude with some policy suggestions for alleviating this labor market problem.