Male-Female Differences in the Low-Wage Labor Market

In recent years, women have made considerable gains relative to men in the labor market. Most notably, the gender gap in hourly wages has narrowed substantially. In this paper we divide workers into three skill groups on the basis of education, and analyze how the hourly earnings of women in each group have progressed relative to those of comparably educated men, the reasons for those gains, and their implications for women’s economic well-being. The fact that women, particularly those with children, are working in such great numbers has often been cited as a motivation for the welfare reforms enacted by many states in the 1990s and by Congress in 1994. The rationale was that if so many women found it possible to work and care for their children, there was no reason why mothers on welfare should not do the same. The narrowing of the gender gap in pay may have been another factor underlying the increased emphasis on women supporting themselves and their children by means of their own earnings rather than welfare. Since 1970, the labor force participation rate of women has risen from 49 percent to 72 percent, and the weekly earnings of women working full-time have risen from 56 percent of men’s to 72 percent (Blau, 1998). Yet, the connection between these trends and the prospects for single mothers ’ self-sufficiency are not so clear. As the Council of Economic Advisors (1998a) recently