Characteristics or Returns: Understanding Gender Pay Inequality among College Graduates in the USA

Abstract

Explanations for the persistent pay disparity between similarly qualified men and women vary between women’s different and devalued work characteristics and specific processes that result in unequal wage returns to the same characteristics. This article investigates how the gender wage gap is affected by gender differences in detailed work activities among full-time, year-round, college-graduate workers in the US using decomposition analysis in the National Survey of College Graduates. Differences in men’s and women’s characteristics account for a majority of the gender wage gap. Additionally, men and women receive different returns to several characteristics: occupational composition, marriage and work activities. While men are penalized more than women for having teaching as their primary work activity, women receive lower rewards for primary work activities such as finance and computer programming. The findings suggest that even with men and women becoming more similar on several characteristics, unequal returns to those characteristics will stall progress towards equality.