Awakening of the New Gender Earnings Gap: A Study of the 1990's Economic Expansion in the U.S. Labor Market

Defying all rational expectations, the longest expansion in the U.S. economy in the 1990s has failed to reduce the gender earnings gap. Empirical results based on Current Population Survey (CPS) show that the gender earnings gap widened from 1994 to 2001. The pattern of gender earnings gap described by the results of a decomposition analysis, overall and across three broadly defined occupation categories, is extremely consistent, indicating that women were adversely affected in comparison with men during the economic expansion in the 1990s. Although slight, this undeniable failure was not only present in women's relatively weaker economic position as a whole, but it also crossed all occupational boundaries, extending its reach to the workers with blue-collar occupations. The result of a slightly widened gender earnings gap casts doubt on expectation of narrowing of the gap developed over the past several decades. In light of this new finding, future labor policy should focus on changing labor market structure to ameliorate the factors that fail to treat females and males equally to narrow the gender earnings gap.