This paper studies interfirm gender segregation in a unique sample of small employers. We focus on small firms because previous research on interfirm segregation has studied only large firms and because it is easier to link the demographic characteristics of employers and employees in small firms. This latter feature permits an assessment of the role of employer discrimination in creating gender segregation. Our first finding is that interfirm segregation is prevalent among small employers. Indeed men and women rarely work in fully integrated firms. Our second finding is that the education and gender of the business owner strongly influence the gender composition of a firm's workforce. This suggests that employer discrimination may be an important cause of workplace gender segregation. Finally, we estimate that interfirm segregation can account for up to 50% of the gender gap in annual earnings.
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Sex Segregation in U.S. Manufacturing
June 1996
Working Paper Number:
CES-96-04
This paper studies interplant sex segregation in the U.S. manufacturing industry. The study differs from previous work in that we have detailed information on the characteristics of both workers and firms, and because we measure segregation in a new and better way. We report three main findings. First, there is a substantial amount of interplant sex segregation in the U.S. manufacturing industry, although segregation is far from complete. Second, we find that female managers tend to work in the same plants as female supervisees, even once we control for other plant characteristics. And finally, we find that interplant segregation can account for a substantial fraction of the male/female wage gap in the manufacturing industry, particularly among blue-collar workers.
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Interfirm Segregation and the Black/White Wage Gap
August 1996
Working Paper Number:
CES-96-06
This paper studies interfirm racial segregation in two newly developed firm-level databases. Within the representative MSA, we find that the interfirm distribution of black and white workers is close to what would be implied by the random assignment of workers to firms. However, we also find that black workers are systematically clustered in "black" employers where managers, owners, and customers are also black. These facts may be reconciled by the facts that a) there are not enough black employers to generate much segregation and that b) perhaps other difficult-to-identify forces serve to systematically integrate black and white workers. Finally, we find that the black/white wage gap is entirely a within-firm phenomenon, as blacks do not work in firms that pay low wages on average.
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NEW EVIDENCE ON SEX SEGREGATION AND SEX DIFFERENCES IN WAGES FROM MATCHED EMPLOYEE-EMPLOYER DATA*
December 1998
Working Paper Number:
CES-98-18
We assemble a new matched employer-employee data set covering essentially all industries and occupations across all regions of the U.S. We use this data set to re-examine the question of the relative contributions to the overall sex gap in wages of sex segregation vs. wage differences by sex within occupation, industry, establishment, and occupation-establishment cells. This new data set is especially useful because earlier research on this topic relied on data sets that covered only a narrow range of industries, occupations, or regions. Our results indicate that a sizable fraction of the sex gap in wages is accounted for by the segregation of women into lower-paying occupations, industries, establishments, and occupations within establishments. Nonetheless, a substantial part of the sex gap in wages remains attributable to the individual's sex. This latter finding contrasts sharply with the conclusions of previous research (especially Groshen, 1991), which indicated that sex segregation accounted for essentially all of the sex wage gap. Further research into the sources of within-establishment within-occupation sex wage differences is therefore much more important than previously thought.
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Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey
December 2008
Working Paper Number:
CES-08-39
Using confidential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and financial capital play in contributing to why female-owned businesses have lower survival rates, profits, employment and sales. We find that female-owned businesses are less successful than male-owned businesses because they have less startup capital, and business human capital acquired through prior work experience in a similar business and prior work experience in family business. We also find some evidence that femaleowned businesses work fewer hours and may have different preferences for the goals of their business.
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Workplace Segregation in the United States: Race, Ethnicity, and Skill
January 2007
Working Paper Number:
CES-07-02
We study workplace segregation in the United States using a unique matched employer employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and . since skill is often correlated with race and ethnicity we assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity. We define segregation based on the extent to which workers are more or less likely to be in workplaces with members of the same group, and we measure segregation as the observed percentage relative to maximum segregation. Our results indicate that there is considerable segregation by education and language in the workplace. Among whites, for example, observed segregation by education is 17% (of the maximum), and for Hispanics, observed segregation by language ability is 29%. Racial (blackwhite) segregation in the workplace is of a similar magnitude to education segregation (14%), and ethnic (Hispanic-white) segregation is somewhat higher (20%). Only a tiny portion (3%) of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace (32%) can be attributed to differences in language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language.
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Changes in Workplace Segregation in the United States Between 1990 and 2000: Evidence from Matched Employer-Employee Data
June 2007
Working Paper Number:
CES-07-15
We present evidence on changes in workplace segregation by education, race, ethnicity, and sex, from 1990 to 2000. The evidence indicates that racial and ethnic segregation at the workplace level remained quite pervasive in 2000. At the same time, there was fairly substantial segregation by skill, as measured by education. Putting together the 1990 and 2000 data, we find no evidence of declines in workplace segregation by race and ethnicity; indeed, black-white segregation increased. Over this decade, segregation by education also increased. In contrast, workplace segregation by sex fell over the decade, and would have fallen by more had the services industry - a heavily female industry in which sex segregation is relatively high - not experienced rapid employment growth.
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Further Evidence from Census 2000 About Earnings by Detailed Occupation for Men and Women: The Role of Race and Hispanic Origin
November 2011
Working Paper Number:
CES-11-37
A 2004 report by the author reviewed data from Census 2000 and concluded "There is a substantial gap in median earnings between men and women that is unexplained, even after controlling for work experience (to the extent it can be represented by age and presence of children), education, and occupation." This paper extends the analysis and concludes that once those characteristics are controlled for, no further explanatory power is attributable to race or Hispanic origin.
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Occupation Inflation in the Current Population Survey
September 2012
Working Paper Number:
CES-12-26
A common caveat often accompanying results relying on household surveys regards respondent error. There is research using independent, presumably error-free administrative data, to estimate the extent of error in the data, the correlates of error, and potential corrections for the error. We investigate measurement error in occupation in the Current Population Survey (CPS) using the panel component of the CPS to identify those that incorrectly report changing occupation. We find evidence that individuals are inflating their occupation to higher skilled and higher paying occupations than the ones they actually perform. Occupation inflation biases the education and race coefficients in standard Mincer equation results within occupations.
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Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States
December 2006
Working Paper Number:
CES-06-32
Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons . Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.
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An Evaluation of the Gender Wage Gap Using Linked Survey and Administrative Data
November 2020
Working Paper Number:
CES-20-34
The narrowing of the gender wage gap has slowed in recent decades. However, current estimates show that, among full-time year-round workers, women earn approximately 18 to 20 percent less than men at the median. Women's human capital and labor force characteristics that drive wages increasingly resemble men's, so remaining differences in these characteristics explain less of the gender wage gap now than in the past. As these factors wane in importance, studies show that others like occupational and industrial segregation explain larger portions of the gender wage gap. However, a major limitation of these studies is that the large datasets required to analyze occupation and industry effectively lack measures of labor force experience. This study combines survey and administrative data to analyze and improve estimates of the gender wage gap within detailed occupations, while also accounting for gender differences in work experience. We find a gender wage gap of 18 percent among full-time, year-round workers across 316 detailed occupation categories. We show the wage gap varies significantly by occupation: while wages are at parity in some occupations, gaps are as large as 45 percent in others. More competitive and hazardous occupations, occupations that reward longer hours of work, and those that have a larger proportion of women workers have larger gender wage gaps. The models explain less of the wage gap in occupations with these attributes. Occupational characteristics shape the conditions under which men and women work and we show these characteristics can make for environments that are more or less conducive to gender parity in earnings.
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