The Gender Pay Gap, Fringe Benefits, and Occupational Crowding

Using data from the 1991 National Longitudinal Survey of Youth, the authors estimate earnings equations for each of seven occupational categories and the aggregate sample. When fringe benefits are excluded from the compensation measure, a gender coefficient is statistically significant (that is, women are found to have received significantly lower compensation than men) within six of the seven occupational categories, the exception being the most female-dominated category. When an index of compensation that includes fringe benefits is used, however, a gender coefficient is significant in only one category, which contains relatively heterogeneous jobs. Gender-specific regressions are used to estimate what part of the earnings gap between men and women is due to differences in traits. The results indicate that occupational assignment is the primary determinant of the pay gap, a result that is consistent with a "crowding" explanation of that gap.