This article examines whether increases in female labor supply contributed to rising wage inequality and declining real wages of less skilled males during the 1980s. While male wage declines are concentrated in the 1980s, female labor supply growth slowed in the 1980s relative to the 1970s. Women also increased the relative supply of skill in the economy in the 1980s. Using state‐level data we estimate cross‐substitution effects between men and women. Once we account for demand changes we find little evidence that women substitute for men or that they contributed to the rapid inequality growth in the 1980s.

Using Survey of Income and Program Participation (SIPP) panels linked to Social Security earnings records, we examine the earnings gap associated with marriage for cohorts of women born between 1936 and 1975. We compare ordinary least squares and fixed-effect estimates. We find that among women who work, the marital earnings gap has all but disappeared in fixed-effects estimates for recent birth cohorts. In fact, among women without children, married women earn more than single women, implying a diminished role for specialization when children are not present. In contrast, the motherhood earnings gap remains large even for recent birth cohorts.

Using linked employer-employee data for the United States, we examine whether shocks to firm revenues are transmitted to the earnings of continuing employees. While full insurance is rejected, the elasticity of worker earnings with respect to persistent shocks in firm revenues is small and consistent with the notion that firms insulate workers from idiosyncratic shocks. Exploring the heterogeneity of effects, we find the largest elasticity in professional services among employees in the top 5% of their employers’ earnings distribution, suggesting that in certain jobs performance pay may be a countervailing force to wage insurance.

We consider a model where firms differ in their productivity and workers are differentiated by skill and gender. A reduction in tariffs induces more productive firms to modernize their technology and enter the export market. New technologies involve computerized production processes and lower the need for physically demanding skills. As a result, the relative wage and employment of women improves in blue-collar tasks, but not in white-collar tasks. We empirically confirm these theoretical predictions using a panel of Mexican establishments and the tariff reductions associated with the North American Free Trade Agreement (NAFTA).

Using the March Current Population Surveys and the 1960 census, this article describes earnings and employment changes for married couples in different types of households stratified by the husband's hourly wage. While declines in male employment and earnings have been greatest for low-wage men, employment and earnings gains have been largest for wives of middle- and high-wage men. These findings cast doubt on the notion that married women have increased their labor supply in the recent decades to compensate for the disappointing earnings growth of their husbands.

Using data from the March Current Population Survey, we document an increase over the past 30 years in wage inequality for males. Between 1963 and 1989, real average weekly wages for the least skilled workers (as measured by the tenth percentile of the wage distribution) declined by about 5 percent, whereas wages for the most skilled workers (as measured by the ninetieth percentile of the wage distribution) rose by about 40 percent. We find that the trend toward increased wage inequality is apparent within narrowly defined education and labor market experience groups. Our interpretation is that much of the increase in wage inequality for males over the last 20 years is due to increased returns to the components of skill other than years of schooling and years of labor market experience. Our primary explanation for the general rise in returns to skill is that the demand for skill rose in the United States over this period.

For years, college-educated women were limited mainly to lower-paying, female-dominated professions such as teaching and nursing. Over the past several decades, however, there has been a remarkable increase in the percentage of college-educated women in higher-paying, “traditionally male” professional occupations. In 1967, the fraction of college-educated women working in these occupations was less than 20 percent. By 1997, this number had increased to almost 40 percent. This increase is particularly striking when compared to the slightly declining trend among college-educated men. What can explain this increase in female professionals? There are a number of possible explanations. One explanation is a demand shift favoring women over men in these highly skilled occupations. While the notion of a “gender-specific” demand shift is compelling in the case of high-school-graduate men and women, who work in very different industries and occupations, the story is much less convincing for the college-educated group. Collegeeducated men and women work in more similar occupations and are presumably closer substitutes for each other. To the extent that they are different, the available evidence suggests that this may have worked to the disadvantage of women (see Francine Blau and Lawrence Kahn, 1997). Another explanation, and the one we focus on in this paper, is that college-educated women have responded to the rise in overall skill demand, a phenomenon which has characterized the U.S. labor market during the 1980’s and perhaps even as early as the 1970’s. An important margin of response for these women may have been labor-market participation. In 1970, less than 60 percent of college-educated women were working. The economy-wide rise in skill demand may have attracted educated women not only from other occupations, but from nonparticipation as well. Since virtually all college educated men work, labor-market participation is less likely to be a factor for men. While we postulate that the overall increase in skill demand played an important role, we are also aware that this is not the only explanation. Within these high-wage professional occupations, women’s wages rose relative to male wages even as women increased their share. This suggests to us that declining discrimination (which both made it easier for women to enter these occupations and resulted in wage convergence vis a vis the male workers) or unobserved skill upgrading also may have played a role. In addition, the spread of more effective birthcontrol devices, Roe v. Wade, and no-fault divorce laws, just to name a few of the factors which changed marriage and fertility patterns of women, also most likely contributed to women’s willingness and ability to invest in “career jobs” (see Claudia Goldin and Lawrence Katz, 2000).

Using data from the March Current Population Survey, the authors document an increase over the past 30 years in wage inequality for males. Between 1963 and 1989, real average weekly wages for the least skilled workers declined by about 5 percent, whereas wages for the most skilled workers rose by about 40 percent. The authors find that the trend toward increased wage inequality is apparent within narrowly defined education and labor market experience groups. Their interpretation is that much of the increase in wage inequality fro males over the last 20 years is due to increased returns to the components of skill other than years of schooling and years of labor market experience.

Using a large, individual-level wage data set, we examine the impact of a major technological innovation—the steam engine—on the demand for skills in the merchant shipping industry. We find that the technical change created a new demand for engineers, a skilled occupation. It had a deskilling effect on production work—moderately skilled able-bodied seamen were replaced by unskilled engine room operatives. On the other hand, able-bodied seamen, carpenters, and mates employed on steam vessels earned a premium relative to their counterparts on sail vessels, and this appears partly related to skill.