SPEAKER 1: What's been happening to the gender pay gap? To answer this question, we look at data on the earnings ratios of full time workers. Now it may occur to you to ask why do we focus on full time workers. And the answer is if I were to just take the earnings of all women and compare them to the earnings of all men, I would have part time workers mixed in there. And it would be misleading, because women are more likely to work part time than men are. And of course, part time workers earn less than full time workers.
Ideally, what we'd like to have is a measure of wages or an hourly rate of pay. Unfortunately, we don't have a long data series for hourly wages. But we do have data on earnings that go back a considerable period of time. These data on the gender earnings ratios are presented in the chart at the right of your screen. Remember, the earnings ratio is computed as the earnings of women divided by the earnings of men. A ratio of 60% means that, on average, women earn 60% of what men earn.
The chart gives the gender earnings ratio for two data series. In red, we have the annual series, which gives the earnings of full time year round workers. This series is available from about the mid 1950s. The series shown in blue is for weekly earnings. And it shows the usual weekly earnings of full time workers. And it's available from the late 1960s. While the exact figure for the gender earnings ratio may be a bit different in each of the two series, they both tell the same story in terms of the trends.
Until the late 1970s or early 1980s, there was a remarkable constancy in the ratio at just around 60%. In some years, the ratio was a bit higher. Some years it was a bit lower. But in every year, it hovered around the 60% figure. In fact, if there was any trend at all, it was a decrease in the ratio in the late 1950s.
Then over the 1980s, we do see a strong sustained increase in the ratio. This rising trend prevailed through perhaps 1990 or 1993, depending on which series you look at. Since then, progress has been fitful.
Looking at the period as a whole, that's from the late 1970s to the early 2000s, the gains have indeed been remarkable, especially viewed in terms of the long constancy in the gender ratio that preceded this period. For women earning about 60% of men's earnings at the end of the 1970s, they earned 76% in 2001, based on the weekly earnings series. Again, this is a substantial change in a relatively short period of time. But of course, it's important to remember that it's far below parity for the two groups.
How do we explain these earnings gains for women? We need to begin by considering the basic factors economists believe are important in explaining the gender pay gap to begin with.
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Francine Blau, the Frances Perkins Professor of Industrial and Labor Relations and Labor Economics at Cornell ILR School, describes trends in the gender pay gap, considers fundamental explanations for the gender pay gap and uses these explanations to understand the trends.
This video is part 3 of 8 in The Gender Pay Gap series.