No: it is at least as large at bottom percentiles of the earnings distribution. Conditional quantile regressions reveal that while the gap at top percentiles is largest among the most-educated, the gap at bottom percentiles is largest among the least-educated. Gender differences in labor supply create more pay inequality among the least-educated than they do among the most-educated. The pay gap has declined throughout the distribution since 2006, but it declined more for the most-educated women. Current economics-of-gender research focuses heavily on the top end; equal emphasis should be placed on mechanisms driving gender inequality for noncollege-educated workers.
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The Gender Pay Gap and Its Determinants Across the Human Capital Distribution
June 2023
Working Paper Number:
CES-23-31R
This paper links American Community Survey data and postsecondary transcript records to examine how the gender pay gap varies across the distribution of education credentials for a sample of 2003-2013 graduates. Although recent literature emphasizes gender inequality among the most-educated, we find a smaller gender pay gap at higher education levels. Field-of-degree and occupation effects explain most of the gap among top bachelor's graduates, while work hours and unobserved channels matter more for less-competitive bachelor's, associate, and certificate graduates. We develop a novel decomposition of the child penalty to examine the role of children in explaining these results.
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Selection and Specialization in the Evolution of Marriage Earnings Gaps
October 2015
Working Paper Number:
CES-15-36
We examine changes in marriage and earnings patterns across four cohorts born between 1936 and 1975, using data from a series of Survey of Income and Program Participation panels linked to administrative data on earnings. We find that for both men and women, marriage has become increasingly positively associated with education and earnings potential. We compare ordinary least squares (OLS) and fixed effect (FE) estimates of the earnings differential associated with marriage. We find that the marriage earnings gap fell for women in fixed-effect estimates implying that the impact of specialization has diminished over time. We also find that increasingly positive selection into marriage means that OLS estimates overstate the reduction in the marriage earnings gap. While our findings imply that marriage is no longer associated with lower earnings among women without minor children in our most recent cohort, the motherhood gap remains large. Among men, we find that the marriage premium actually increases for more recent birth cohorts in fixed-effects regressions.
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Using Internal Current Population Survey Data to Reevaluate Trends in Labor Earnings Gaps by Gender, Race, and Education Level
July 2008
Working Paper Number:
CES-08-18
Most empirical studies of trends in labor earnings gaps by gender, race or education level are based on data from the public use March Current Population Survey (CPS). Using the internal March CPS, we show that inconsistent topcoding in the public use data will understate these gaps and inaccurately capture their trends. We create a cell mean series beginning in 1975 that provides the mean of all values above the topcode for each income source in the public use March CPS and better approximate earnings gaps found in the internal March CPS than was previously possible using publically available data.
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Using the P90/P10 Index to Measure U.S. Inequality Trends with Current Population Survey Data: A View From Inside the Census Bureau Vaults
June 2007
Working Paper Number:
CES-07-17
The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.
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U.S. Long-Term Earnings Outcomes by Sex, Race, Ethnicity, and Place of Birth
May 2021
Working Paper Number:
CES-21-07R
This paper is part of the Global Income Dynamics Project cross-country comparison of earnings inequality, volatility, and mobility. Using data from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics (LEHD) infrastructure files we produce a uniform set of earnings statistics for the U.S. From 1998 to 2019, we find U.S. earnings inequality has increased and volatility has decreased. The combination of increased inequality and reduced volatility suggest earnings growth differs substantially across different demographic groups. We explore this further by estimating 12-year average earnings for a single cohort of age 25-54 eligible workers. Differences in labor supply (hours paid and quarters worked) are found to explain almost 90% of the variation in worker earnings, although even after controlling for labor supply substantial earnings differences across demographic groups remain unexplained. Using a quantile regression approach, we estimate counterfactual earnings distributions for each demographic group. We find that at the bottom of the earnings distribution differences in characteristics such as hours paid, geographic division, industry, and education explain almost all the earnings gap, however above the median the contribution of the differences in the returns to characteristics becomes the dominant component.
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Understanding Criminal Record Penalties in the Labor Market
June 2025
Working Paper Number:
CES-25-39
This paper studies the earnings and employment penalties associated with a criminal record. Using a large-scale dataset linking criminal justice and employer-employee wage records, we estimate two-way fixed effects models that decompose earnings into worker's portable earnings potential and firm pay premia, both of which are allowed to shift after a worker acquires a record. We find that firm pay premia explain a small share of earnings gaps between workers with and without a record. There is little evidence of variable within-firm premia gaps either. Instead, components of workers' earnings potential that persist across firms explain the bulk of gaps. Conditional on earnings potential, workers with a record are also substantially less likely to be employed. Difference-in-differences estimates comparing workers' first conviction to workers charged but not convicted or charged later support these findings. The results suggest that criminal record penalties operate primarily by changing whether workers are employed and their earnings potential at every firm rather than increasing sorting into lower-paying jobs, although the bulk of gaps can be attributed to differences that existed prior to acquiring a record.
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Granular Income Inequality and Mobility using IDDA: Exploring Patterns across Race and Ethnicity
November 2023
Working Paper Number:
CES-23-55
Shifting earnings inequality among U.S. workers over the last five decades has been widely stud ied, but understanding how these shifts evolve across smaller groups has been difficult. Publicly available data sources typically only ensure representative data at high levels of aggregation, so they obscure many details of earnings distributions for smaller populations. We define and construct a set of granular statistics describing income distributions, income mobility and con ditional income growth for a large number of subnational groups in the U.S. for a two-decade period (1998-2019). In this paper, we use the resulting data to explore the evolution of income inequality and mobility for detailed groups defined by race and ethnicity. We find that patterns identified from the universe of tax filers and W-2 recipients that we observe differ in important ways from those that one might identify in public sources. The full set of statistics that we construct is available publicly as the Income Distributions and Dynamics in America, or IDDA, data set.
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Understanding Earnings Instability: How Important are Employment Fluctuations and Job Changes?
August 2009
Working Paper Number:
CES-09-20
Using three panel datasets (the matched CPS, the SIPP, and the newly available Longitudinal Employment and Household Dynamics (LEHD) data), we examine trends in male earnings instability in recent decades. In contrast to several papers that find a recent upward trend in earnings instability using the PSID data, we find that earnings instability has been remarkably stable in the 1990s and the 2000s. We find that job changing rates remained relatively constant casting doubt on the importance of labor market 'churning.' We find some evidence that earnings instability increased among job stayers which lends credence to the view that greater reliance on incentive pay increased instability of worker pay. We also find an offsetting decrease in earnings instability among job changers due largely to declining unemployment associated with job changes. One caveat to our findings is that we focus on men who have positive earnings in two adjacent years and thus ignore men who exit the labor force or re-enter after an extended period. Preliminary investigation suggests that ignoring these transitions understates the rise in earnings instability over the past two decades.
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Who Scars the Easiest? College Quality and the Effects of Graduating into a Recession
September 2024
Working Paper Number:
CES-24-47
Graduating from college into a recession is associated with earnings losses, but less is known about how these effects vary across colleges. Using restricted-use data from the National Survey of College Graduates, we study how the effects of graduating into worse economic conditions vary over college quality in the context of the Great Recession. We find that earnings losses are concentrated among graduates from relatively high-quality colleges. Key mechanisms include substitution out of the labor force and into graduate school, decreased graduate degree completion, and differences in the economic stability of fields of study between graduates of high- and low-quality colleges.
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Pay, Productivity and Management
September 2021
Working Paper Number:
CES-21-31
Using confidential Census matched employer-employee earnings data we find that employees at more productive firms, and firms with more structured management practices, have substantially higher pay, both on average and across every percentile of the pay distribution. This pay-performance relationship is particularly strong amongst higher paid employees, with a doubling of firm productivity associated with 11% more pay for the highest-paid employee (likely the CEO) compared to 4.7% for the median worker. This pay-performance link holds in public and private firms, although it is almost twice as strong in public firms for the highest-paid employees. Top pay volatility is also strongly related to productivity and structured management, suggesting this performance-pay relationship arises from more aggressive monitoring and incentive practices for top earners.
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