Gender divergence in premarket skill acquisition and wage inequality

• Main Author: MYONG, Sunha
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: gender wage gap; skill acquisition; wage inequality; Economics; Work, Economy and Organizations
• Online Access: https://ink.library.smu.edu.sg/soe_research/2509; https://ink.library.smu.edu.sg/context/soe_research/article/3508/viewcontent/Gender_divergence_MYONG.pdf
• Institution: Singapore Management University

I study the changes in premarket skills and the evolution of the wage distribution across two cohorts using the NLSY79 and NLSY97. To estimate the relative importance of changes in premarket skills and changes in skill prices in explaining the evolution of the wage distribution, I apply the DiNardo, Fortin, and Lemieux decomposition method (DiNardo et al. 1996). I find a substantial gender divergence in premarket skill acquisition and wage gain across the two cohorts. Women's wage gain associated with changes in premarket skills is greater than that of men's at all levels of the wage distribution. Changes in premarket skills across the two cohorts explain most of the decrease in the gender wage gap in the middle range of the wage distribution but only explain about half of the decrease in the gender wage gap at both ends of the wage distribution. Among various premarket skill measures, changes in cognitive skills and final degree attainment play important roles in narrowing the gender wage gap. Furthermore, due to changes in premarket skill acquisition, upper-tail wage inequality widened for men but narrowed for women. I find skill prices for men and women changed differently across two cohorts, which might have contributed to the diverging trends in skill acquisition by gender.