Minding the Gap: Gender Disparities in the Early Career Wages of College Graduates and the Role of Individual Choice

Atherwood, Serge
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More than half a century after it was brought to the attention of the American public, the gender wage gap remains contentious and imperfectly understood. Skeptics assert the gap is a myth, pointing to mounting evidence that the choices individuals make about education and work account for most, if not all, of the widely touted 20% wage penalty women experience. Believers maintain that female workers continue to earn less than their male peers for unjustifiable reasons despite policymaking as far back as the Equal Pay Act of 1963 to eliminate discrimination based on sex. Which side is correct? Are they both correct?

This dissertation is one attempt at an answer. Using two sets of publicly available survey data, I examined U.S. wage differentials for males and females of the 1983–84 birth cohort shortly after their completion of a bachelor’s degree in the late-mid to early-late 2000s and for several years thereafter. The effects of individual choices on employment and wage outcomes are relevant to young adults at the start of their careers, especially those who invested time, money, and effort to improve their employment and career prospects through higher education. Empirical analyses were guided by a conceptual framework using a life course approach to integrate the human capital model of wage-setting (epitomizing the individual choice argument) and social determinants theory (representing the believers’ position on discrimination). Results showed college educated females earned lower wages and experienced less wage growth than their equally qualified male counterparts despite conditioning or controlling for measures of individual choice and notwithstanding a labor market environment more equitable to women than any that came before. These divergent trajectories constituted a pattern that transcended the relationship between high levels of human capital and small wage gaps at early career outset and suggest that even for recent cohorts of educationally advantaged young adult female workers, individual choice is an inadequate explanation for the wage disparities they experienced in the aggregate.

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College graduates, Early career, Gender wage gap, Human capital, Social determinants