Changing Levels or Changing Slopes ?

The gender wage gap among adult full-time workers, after controlling for educational attainment and other observable characteristics, is about half the size it was in 1980. Using Census and Current Population Survey data from 1959 through 1999, we assess the relative contributions of two factors to the decline in the gender wage gap: changes across cohorts in the relative slopes of men’s and women’s age-earnings profiles, versus changes in relative earnings levels at labor market entry. We find that changes in relative slopes account for about one-third of the narrowing of the gender wage gap over the past 40 years. Under fairly general conditions, we argue that this provides an upper-bound estimate of the contribution of all post-school investments, including experience, to the decline of the gender wage gap.