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OCR for page 117
q Occupational Segregation and
~ Labor Market Discr~nabon
FRANCINE D. BLAU
The post-WorIcl War II period has wit-
nessed a rapid growth in female labor force
participation and a steady narrowing of sex
differences in the extent of participation in
work outside the home. In 1950, 86.8 per-
cent of the (adult) male population partici-
pated in the labor force as compared with
33.9 percent of the (adult) female population
(U.S. Dept. of Labor, ETA, 19811. By March
1982, 76.6 percent of males and 52.1 per-
cent of females were labor force partici-
pants.~ The large increase in participation
~ Black women's participation rates have historically
been considerably higher than those of white women,
although the differential has declined in recent years.
In 1955 the labor force participation rate of black and
other nonwhite women was 46.1 percent in comparison
with 34.5 percent for whites. By 1980 the participation
rates were 53.4 and 51.3 percent for nonwhites and
whites, respectively. The participation rates of black
males have fallen more sharply than those of white
males over this period. In 1955 the participation rate
of both white and nonwhite males was about 85 per-
cent; by 1980 the participation rates of whites and non-
whites were 78.3 and 70.8 percent, respectively (U.S.
Dept. of Labor, BLS, 1980, 1981~. These differing ra-
cial trends in participation rates are an important factor
in evaluting the recent gains in black earnings noted
below. See Brown (1981~.
~7
rates of married women (with husband pre-
sent) from 21.6 percent in 1950 to 51.0 per-
cent in March 1981 (U.S. Dept. of Labor,
BLS, 1982) was a major factor in the expan-
sion of the female labor force.
These trends appear to have been accom-
panied by an increase in the labor force at-
tachment of women. This is suggested by
the marked rise in the labor force partici-
pation rates of married women (with hus-
band present) with preschool-age children
from 11.9 percent in 1950 to 47.8 percent
in March 1981 (U.S. Dept. of Labor, BLS,
November 19811. Further evidence of the
increasing stability of women's participation
is provided by the decrease in labor force
turnover among women that has occurred
over the last 20 years, particularly since the
late 1960s (Lloyd and Niemi, 19791.2 At the
same time, the gap between men's and
women's educational attainment (average
2 Labor force turnover is measured by the ratio of
the labor force experience rate (the percentage of women
who were in the labor force at some time during the
year) to the annual average labor force participation
rate (the percentage of women who where in the labor
force at any particular point in time or survey week).
OCR for page 118
118
. .
FRANCINE D. BLAU
years of schooling) has been eliminated (Lloyd
and Niemi, 1979~.
These dramatic shifts in the quantity and
quality of labor supplied to the market by
women do not appear to have been accom-
panied by a noticeable improvement in the
relative economic status of women workers.
In fact, the median earnings of year-round,
full-time women workers as a percentage of
men's fell from 63.9 to 60.2 between 1955
and 1981 (Lloyd and Niemi, 1979; U. S. Dept.
Of Commerce, 1982~. Most of the decline
had occurred by the early 1960s, and the
earnings ratio has been roughly stable since
then. The occupational distributions of men
and women continue to differ significantly.
A small movement toward greater similarity
appears to have occurred between 1960 and
1970 based on census data (Blau and Hen-
dricks, 1979~. Some estimates suggest that
the rate of decline in segregation may have
accelerated between 1972 and 1981, al-
though the magnitude of segregation re-
mained substantial (Belier, this volume).3
Throughout this period over 60 percent of
the female (or male) labor force would have
had to change jobs to eliminate the over-
representation of women in certain occu-
pations and their corresponding underre-
presentation in others (Blau and Hendricks,
1979; Beller, this volume).
The precise role of labor market discrim-
ination in producing these sex differentials
in occupational distributions and earnings
has been the subject of considerable debate
among economists. In the first section we
consider the explanations that have been of-
3 Lloyd and Niemi (1979) find no change in the de-
gree of segregation over this period using census data
for 1970 and Current Population Survey (CPS) data for
1977. However, using comparable CPS data, Beller (in
this volume) finds that segregation continued to decline
over the 1970s. Full resolution of this disparity in re-
sults may await the availability of the 1980 census data.
In any case both studies suggest that the magnitude of
segregation remained quite high.
fered for sex differentials in employment
patterns and earnings. We focus on the var-
ious neoclassical and institutional models of
sex (and race) discrimination and on the al-
ternative explanation provided by the hu-
man capital model, which emphasizes the
voluntary choices of women. In the second
section we first evaluate the empirical evi-
dence on the degree of sex discrimination
in the labor market, and then turn to an
assessment of the role of employment seg-
regation by sex in producing differential out-
comes for men and women workers.
ECONOMIC EXPLANATIONS OF SEX
DIFFERENTIALS IN OUTCOMES
Theories of Discrimination
While most of the discrimination models
discussed here were developed to explain
or at least were illustrated in terms of-
racial differences, we here apply them to
sex differences. The foundation for the mod-
ern neoclassical analysis of labor market dis-
crimination was laid by Becker (19571. For
simplicity, it is assumed that male labor and
female labor are perfect substitutes. That is,
men and women are equally productive and
thus deserving of equal wages in the absence
ofdiscrimination. Discriminatory tastes may
exist in employers, coworkers, and/or cus-
tomers.
Employers with "tastes for discrimina-
tion" against women will hire women work-
ers only at a wage discount that is sufficiently
large to compensate them for the disutility
of employing women. Becker also showed
that even if employers themselves have no
tastes for discrimination against women,
profit-maximizing behavior by employers may
result in sex discrimination if employees or
customers have such discriminatory tastes.
Male employees with tastes for discrimi-
nation against women will work with them
only at a wage premium that is sufficient to
compensate them for the disutility offemale
OCR for page 119
OCCUPATIONAL SEGREGATION AND LABOR MARKET DISCRIMINATION
119
coworkers.4 Customers with tastes for dis-
crimination against women will buy prod-
ucts or services produced or sold by women
only at a lower price. Intuitively we would
expect this type of discrimination to be more
important in sales or service occupations where
face-to-face contact with the customer/client
occurs. As a consequence of coworker or cus-
tomer discrimination employers may, under
certain circumstances, discount female wages
to compensate for the higher costs (coworker
discrimination) or lower revenues (customer
discrimination) attendant upon employing
women.
A definition of wage discrimination flow-
ing from Becker's work has guided much of
the empirical analysis of labor market dis-
crimination. Wage discrimination (the mar-
ket discrimination coefficient) may be de-
fined as the difference between the actual
ratio of male to female wages and the ratio
that would exist in the absence of discrim-
ination assuming perfect substitutability,
this would be wage parity (Becker, 1957, p.
1261. In empirical work, where the wages
of heterogeneous male and female labor are
compared, this is approximated by the no-
tion of pay differentials that are not ac-
counted for by productivity differentials.
While the type of discrimination defined
by Becker does not necessarily predict that
occupational segregation by sex will occur,
it may be made compatible with occupa-
tional segregation if we postulate that tastes
for discrimination against women vary across
occupational categories. The issue may be
more one of socially appropriate roles than
of the desire to maintain social distance that
Becker emphasized. Employers may have
no compunctions about hiring women as
secretaries but may be reluctant to employ
4 The notion of employee discrimination is developed
by Bergmann and Darity (1981) in terms of productivity
reductions due to employee hostility rather than of
direct increases in costs due to compensating differ-
entials.
them as pipefitters. Men may be willing to
work with women in complementary (co-
operative) or subordinate positions but dis-
like interacting with women as peers or
superiors. Customers may be delighted to
purchase nylons from female clerks but avoid
women car salespersons or attorneys. These
discriminatory tastes may be held independ-
ently of beliefs that women would be less pro-
ductive than men in nontraditional pursuits.
Ibis latter possibility is considered under no-
tions of statistical discrimination below.
While such reasoning makes Becker's
mode} more compatible with the large mag-
nitude of occupational segregation that we
observe in the labor market, problems re-
main. First, as Blau and Jusenius (1976) point
out, a high degree of segregation is stfl} un-
likely given (1) the wage flexibility generally
assumed in neoclassical models and (2) the
existence of a large ceteris Paris wage dif-
ferential between men and women. (The
empirical work considered below provides
support for the existence of a substantial pay
gap that is not accounted for by the pro-
ductivity-related characteristics of men and
women.) For example, let us consider the
case in which discriminatory tastes reside in
employers. Employers whose tastes for dis-
crimination are so strong that they exceed
the marketwide discrimination coefficient
wit} not hire women. Employers who are
exactly compensated for the disutility of hir-
ing women by the market discrimination
coefficient will be indifferent to whether they
employ men or women and will presumably
hire both. Employers with relatively weak
tastes for discrimination who are over-
compensated by the marketwide discrimi-
nation coefficient will hire only women.
A high degree of occupational segregation
by sex due to discrimination will not be ob-
served unless most employers of workers in
"male" jobs are in the first category, that is,
unless most employers have such strong tastes
for discrimination against women in male
jobs that they are not sufficiently compen-
sated by the large ceteris paribus pay dif-
OCR for page 120
120
FRANCINE D. BLAU
ferentials that appear to exist between men
and women. This seems to be unlikely.
Differences in tastes for discrimination
among employers (employees, customers) can
perhaps more plausibly produce sex segre-
gation by firm in the Becker mode} (Arrow,
19731. That is, women would tend to be em-
ployed by less discriminatory employers who
are overcompensated by the prevailing sex
pay differential. A problem that arises here is
the stability of this situation in the face of
competitive forces (see below). Women may
also, in this model, find better employment
opportunities working with less discrimina-
tory employees or selling to (serving) less clis-
criminatory customers (clients).
Second, in the Becker mocle! cliscrimi-
natory pay differentials are in some sense
the price paid by the discriminated group
for associating with the discriminators. In
general, differences between the two groups
in factor endowments make such association
profitable even in the face of discrimination.
However, sufficient opportunities in a seg-
regated context can eliminate the need for
pay differentials. This may be illustrated by
the case in which tastes for discrimination
reside in coworkers. In the case of perfect
substitutes, for example among workers in
the same occupational category, complete
sex segregation by firm is expected, since
sexually integrated work forces are more
costly (i.e., men must be paid a premium
to work with women). The necessity for wage
differences is obviated by such segregation,
however, since men and women do not work
together (and thus it is not necessary to com-
pensate male workers for the disutility of
working with women). Discriminatory pay
differentials will arise in this case only if for
some reason (e.g., costs of adjustment due to
personnel investments in workers fArrow,
.
1973] ~ complete segregation is not possible.5
5 Of course, one may wonder why men rather than
women are the recipients of these personnel invest-
ments. As Arrow (1973) points out, where there are
From this perspective one may question why
a high degree of occupational segregation by
sex appears to be associated with large dis-
criminatory pay clifferentials.
Even if discrimination is made compatible
with occupational segregation in the Becker
model, segregation does not play a causal
role in generating the sex pay differential.
Rather, both occupational and pay differ-
entials are due to tastes for discrimination
among employers, coworkers, and/or cus-
tomers. Eliminating occupational segrega-
tion (were it possible to do so) would not
eliminate the pay differential. Indeed, re-
ducing segregation might require still fur-
ther discounting of female wages, since it
would necessitate women's making inroads
into areas characterized by stronger discrim-
inatory tastes on the part of employers, co-
workers, and/or customers.
Bergmann (1974) has developed an anal-
ysis in the Becker tradition that gives a more
central role to employment segregation. In
Bergmann's "overcrowding" model, 6 dis-
criminatory employer tastes result in the
segregation of male and female labor into
two sets of occupation. While such segre-
gation need not result in sex pay differen-
tials, differentials will occur if job oppor-
tunities (clemand) in the female sector are
small relative to the supply of female labor.
Employers who do hire women will utilize
the labor-intensive production techniques
that their lower wages make profitable. Thus,
costs to change history matters. Given historically ris-
ing female participation rates, women, as relatively new
entrants, may find males already in place in many sec-
tors. However, women have always been heavily con-
centrated in a few female-dominated activities, even
when they constituted a small proportion of the labor
force. Assuming discrimination played a role in this
segregation, it appears that the notion of the personnel
investment tends to require both employer and em-
ployee discrimination. Further, once we have person-
nel investments men and women are no longer in fact
equally productive, although they may be potentially
equally productive (see below).
6 See also Edgeworth (1922) and Fawcett (1918).
OCR for page 121
OCCUPATIONAL SEGREGATION AND LABOR MARKET DISCRIMINATION
in contrast to Becker's (1957) analysis, seg-
regation may play a causal role in producing
discriminatory pay differentials. Further,
discrimination may cause both pay and pro-
ductivity differentials between potentially
equally productive male and female labor
women are less productive than men be-
cause, as a result of segregation and crowd-
ing, they have less capital to work with. The
Bergmann formulation does not overcome
the problem with the Becker model, noted
earlier, that an extreme distribution of em-
ployer tastes is necessary to generate the
high level of segregation we observe. How-
ever, while Bergmann postulated employer
discrimination as the source of segregation,
the overcrowding concept may be linked to
any postulated reason for segregation. It is
thus a persuasive explication of the wage
consequences of segregation, regardless of
its cause.
Another question that has been raised
about the Becker analysis, particularly with
regard to the case of employer discrimina-
tion, is the issue of the survival of discrim-
ination in the long run under perfect com-
petition (Arrow, 19731. Assuming that
employer tastes for discrimination against
women vary, the least discriminatory firms
that hire the highest proportion of (Iower-
priced) female labor will have lower costs
and thus higher profits. Capital will flow
toward these firms, and, assuming constant
returns to scale, only the least discrimina-
tory (Iowest-cost) firms will survive. The ap-
parent persistence of sex (and race) discrim-
ination in the labor market over time has
given rise to additional analyses of discrim-
ination, which we shall consider below.
However, this criticism of the Becker mode}
is a double-edged sword in that it creates
skepticism among many economists that la-
bor market discrimination is indeed respon-
sible (in whole or part) for the observed sex
clifferences,in 'market outcomes. Perhaps the
best d~oped alternative explanation is the
human capital mode} considered in the next
section.
121
One obvious solution to the problem raised
above is that noncompetitive elements are
responsible for the persistence of discrimi-
nation. Becker (1957) hypothesized that em-
ployer discrimination should, on average,
be less in competitive industries than in mo-
nopolistic ones. In the case of sex discrim-
ination the focus has tended to be on im-
perfections in the factor market rather than
in the product market. Madden (1973) has
developed Robinson's (1933) monopsony
mode} to explain sex differences in wages.
Monopsony describes the situation in which
labor faces a single buyer. A price-discrim-
inating monopsonist will pay female labor
less if it is less elastically supplied to the
firm than is male labor. Assuming that the
supply curve of labor to the firm is positively
sloped, the elasticity of labor supply to the
firm is the percentage increase (decrease) in
labor hours supplied to the firm in response
to a given percentage increase (decrease) in
the wage offered by the firm. A lower elas-
ticity of labor supply for women thus means
that the quantity of labor supplied by women
to the firm is less responsive to wage changes
than is the case for men.
The persuasiveness of this explanation for
aggregate pay differentials by sex is unclear,
a priori. One issue relates to Madden's (1973)
argument that female labor is less elastically
supplied to the firm. On the one hand, as
Madden (1973, 1976) argues, such factors as
occupational segregation and the power of
male unions may limit women's alternatives
and thus decrease their wage elasticity of
supply to the firm, all else equal. Supply-
side factors, such as the tendency for women
to engage in less job search than men do or
to seek jobs that are closer to home, could
also contribute to this result. On the other
hand, as Blau and Jusenius (1976) argue, the
aggregate female labor supply curve (to the
market) is more elastic than the male labor
supply curve (to the market). This has con-
sequences for the elasticity of supply to the
firm in that home work provides a viable
alternative for women at the margin of labor
OCR for page 122
122
FRANCINE D. BLAU
-
force participation.7 Furthermore, if men are
more likely than women to acquire firm-
specif~c training, that would also lower their
mobility relative to women. A second issue
relates to the degree of monopsony that ac-
tually exists in the labor market. Pure mon-
opsony (one buyer) in a labor market is un-
doubtedly quite rare. However, Madden
(1973) argues that there are considerable
monopsonistic elements in the labor mar-
ket. This is an empirical issue deserving of
more attention. Moreover, it is not clear
that the case of few buyers of labor can be
analyzed in the same way as can the case of
one buyer.
It seems likely that the monopsony ex-
planation is more applicable to specific oc-
cupations and labor markets than to the ag-
gregate sex pay differential.8 An ideal case
might be the employee! female (or male)
Ph. D. with an employed Ph. D. spouse in a
one-university town. Nonetheless, this the-
ory does set up a mechanism by which oc-
cupational segregation may lower women's
wages relative to men's—in this case by
reducing women's options.
A second approach to explaining the long-
run existence of discrimination is the notion
of statistical discrimination (Phelps, 1972;
Arrow, 1972a,b, 1973; Aigner and Cain,
19771. Statistical discrimination provides a
motivation for discrimination that is com-
patible with profit-maximizing behavior on
the part of employers. It stems from im-
perfect information and may take one of two
forms.
7 Women are more likely than men are to quit their
jobs to leave the labor force, while men are more likely
than women to quit to change jobs (Barnes and Jones,
1974~.
8 Some preliminary evidence in support of the mon-
opsony view as an explanation for male-female wage
differentials across urban areas, based on data for white
males and white, never-married females, is presented
by Cardwell and Rosenzweig (1980~. Note that in re-
stricting their analysis to never-married females they
focus upon women with the lowest value of nonmarket
time.
First, employers may discriminate against
women because of real or perceived average
productivity or productivity-related behav-
ioral differences between men and women.
In this case sex is assumed to provide in-
formation regarding expected procluctivity.
Aigner and Cain (1977) argue that economic
discrimination does not exist if the employ-
er's perception of the average sex difference
is correct—since on average each group is
paid in proportion to its productivity. How-
ever, they acknowledge as disquieting the
result that at each ability level women will
receive lower pay than mend Others have
called this discrimination in that the "indi-
vidual is judged on the basis of the average
characteristics of the group . . . to which he
or she belongs rather than upon his or her
own characteristics" (lturow, 1975, p. 172~. is
Implicit in this view seems to be the as-
sumption that other personal characteristics
besides sex are readily available and that
while the sex difference exists, on average
it would not be present in a ceteris paribus
comparison. If so, perhaps this might be
more appropriately considered mistaken be-
havior on the part of employers. But, as
Aigner and Cain (1977) point out, discrim-
ination based on employers' mistaken be-
liefs is as unlikely (or even more unlikely)
to persist over time in the face of compet-
itive forces as is discrimination based on em-
ployer tastes. So the question of the per-
sistence of discrimination in the long run
remains.
9 This assumes that the variances of the measurement
error and of the productivity indicator are the same for
males and females.
it See also Ellau and Jusenius (1976) and Piore (1971~.
Lewin and England (1982) argue that it is the explicit
use of ascriptive characteristics like race or sex in per-
sonnel decisions that constitutes the discriminatory as-
pect of statistical discrimination, even when the em-
ployer perceptions are correct. From a normative
perspective this is certainly correct, but it is not clear
that it counters Aigner and Cain's (1977) argument that
such behavior does not constitute economic discrimi-
nation.
OCR for page 123
OCCUPATIONAL SEGREGATION AND LABOR MARKET DISCRIMINATION
123
Arrow's (1973, 1976) notion of perceptual
equilibrium sheds some light on this issue.
Arrow's model allows for the endogeneity of
qualifications workers become qualified
by making some type of investment in them-
seIves where the decision to invest depends
on the gain from qualifying. In this case em-
ployers' perceptions of sex differences in
qualifications may become self-confirmin~
even when there is no intrinsic sex differ-
ence in ability or behavior. Multiple equi-
libria may result. For example, if employers'
view of female job instability leads them to
give women less training and to assign them
to jobs where the cost of turnover is mini-
mized, women may respond by exhibiting
the unstable behavior employers expect. This
in turn confirms employer perceptions. On
the other hand, if employers believe women
are stable workers, they will hire women
into positions that are sufficiently rewarding
to inhibit instability (Arrow, 1976. Here,
pay and productivity differences between
potentially equally productive male and fe-
male workers that may persist in the long
run can result from employers' in some sense
erroneous beliefs. Viewing the matter some-
what differently, the employers' ex post
"correct" assessment of sex differences in
average productivity may be seen to result
from their own discriminatory actions.
Moreover, the resulting female sector may
be subject to a Bergmann-type overcrowd-
ing problem, further reducing relative wages
there.
A second type of statistical discrimination
may occur even if the two sexes have equal
average abilities or behavior. Risk-averse
employers may discriminate against women
if their ability or behavior is less reliably
predicted by some indicatorks) than is men's
(Phelps, 1972; Aigner and Cain, 19771. How-
ever, Aigner and Cain express doubts that
risk aversion could cause discriminatory pay
differentials of the magnitude obtained by
~i See also Spence (1973, 1974~.
empirical studies (see below). As they note,
dispersion in risk aversion among employers
should result in the bidcling up of women's
wages, just as the existence of less discrim-
inatory firms should erocle discriminatory
pay differentials in the Becker-type taste-
for-discrimination model. Further, the ex-
istence of a large risk discount of women's
wages should trigger a market for test in-
struments or indicators that are equally re-
liable for them.
At present neither the role of occupa-
tional segregation nor the issue of the per-
sistence of discrimination in the long run
appears to be satisfactorily understood at the
theoretical level. i2 Perhaps the most prom-
ising notion advanced here is Arrow's idea
of perceptual equilibrium, a kind of "vicious
circle," or feedback theory of discrimina-
tion, which, as noted earlier, can accom-
modate and provide some rationale for oc-
cupational segregation. i3 The overcrowding
concept can be appended to this model to
imply a further reduction in wages due to
segregation. A problem, however, is that
this mode} cannot explain the sex segrega-
tion that appears to exist among jobs re-
quiring similar amounts of skill, stability,
etc. While this may not be a major com-
ponent of occupational segregation, it is
probably a nontrivial component.
Institutional models, such as the internal
labor market analysis or the dual labor mar-
ket mode! (Doeringer and Piore, 1971; Piore,
1971),~4 that give a more explicit role to oc-
cupations may be helpful here. Blau and
Jusenuis (1976) argue that the major con-
tribution of such models is not to suggest
i2 The latter point is emphasized in Darity's (1982)
consideration of racial pay differentials.
i3 A number of other authors have emphasized the
importance of feedback effects in analyzing sex pay and
occupational differentials. See, e.g., Bergmann (1976),
Blau (1977), Ferber and Lowry (1976), Strober (1976),
Weiss and Gronau (1981~.
t4 See also Cain (1976), Gordon (1972), and Wachter
(1974~.
OCR for page 124
124
FRANCINE D. BLAU
new explanations for sex differentials in
earnings and employment distributions but
rather to elucidate the linkage between the
two: to suggest why the same set of factors
that produce earnings differentials is also
likely to generate employment segregation.
They argue that under the administered sys-
tem of the internal labor market, the firm
attaches wage rates to occupational cate-
gories rather than to individuals (see also
Thurow, 19751. Under such circumstances
the only way in which the firm can distin-
guish between men and women in terms of
pay is to assign them to different job cate-
gories. Within occupational categories, in-
stitutional constraints mandate equal pay for
equal work, except for relatively small dis-
tinctions based on seniority and/or merit
considerations. Such group treatment of in-
dividuals will be most efficient (wfl} result
in the discarding of the least information) if
occupational categories are as homogenous
as possible. Thus, employers are likely to
structure female jobs to fit the perceived av-
erage characteristics of women workers. This,
in turn, influences women's behavior and pro-
ductivity a la Arrow's perceptual equilibrium.
Bergmann's overcrowding mechanism may
further widen the pay differential between
male and female jobs.
The Human Capital Alternative
Theories of discrimination are concerned
with explaining occupational and pay differ-
entials between (potentially) equalEy produc-
tive men and women. Me aggregate figures
cited earlier in fact compare heterogeneous
male and female labor. Some or ad of the
observed occupation and pay differences may
in fact be due to productivity differences be-
tween the sexes. The human capital mode!
can provide a consistent explanation for oc-
cupation and pay differentials by sex in terms
of the voluntary choices of women rather than
of market discrimination against them. It then
becomes an empirical question, albeit a dif-
ficult one, to determine which view is correct
or what portion of the observed differences is
accounted for by each explanation.
As developed by Mincer and Polachek
(1974) and others, the human capital anal-
ysis calls attention to the traditional division
of labor by sex within the family under which
women can expect shorter and more dis-
continuous involvement in market work than
can men. This reduces their long-run payoff
to human capital investments, since they
have a shorter work life over which to reap
the returns. Similarly, employers will be re-
Juctant to invest in firm-specific training for
women workers. Thus, women may earn less
than men both because of their lesser amount
of labor market experience and because of
the lower returns to experience they obtain
(the latter reflecting their smaller invest-
ments per unit of time). Female earnings
are further reduced by the depreciation of
their stock of human capital during the time
they spend out of the labor force.
The human capital mode! can also provide
a theory of occupational choice to explain
occupational segregation by sex (Polachek,
1976, 1979, 1981; ZelIner, 1975; Landes,
19771. According to this view women wit!
tend to avoid occupations requiring consid-
erable investments in on-thejob training and
having high rates of depreciation for time
spent out of the labor force. Thus, we would
expect predominantly female jobs to have
relatively flat age-earnings profiles.
One problem with this analysis is that the
sexual division of labor within the family is
in turn influenced by the relative market
rewards (wage rates) of husband and wife
(Becker, 1965, 1973~. This implies that labor
market discrimination against women could
influence their allocation of time between
the home and the market and thus the amount
and types of their human capital invest-
ments. From the standpoint of empirical work
this means that analyses which treat such
variables as experience and education as ex-
ogenous may underestimate the extent of
OCR for page 125
OCCUPATIONAL SEGREGATION AND LABOR MARKET DISCRIMINATION
125
labor market discrimination (Weiss and
Gronau, 1981~. Further, women's Tower re-
turns to experience may reflect employers'
reluctance to provide opportunities for firm-
specific training as well as their own vol-
untary decisions. In the latter case it would
also be important to determine whether the
employers' decisions are in fact justified by
ceteris Paribas sex differences in quit pro-
pensities.
EMPIRICAL FINDINGS
As indicated in the preceding section, there
are alternative views as to how labor market
discrimination might produce occupational
and pay differences between men and
women. Further, the human capital mode}
provides an alternative explanation for sex
differences in market outcomes that is con-
sistent with voluntary decision making by
women rather than with discrimination
against them. For the most part empirical
research has been focused on the question
of whether or not labor market discrimina-
tion against women (and minorities) exists.
Choosing among alternative models of dis-
crimination and understanding the causes
and consequences of employment segrega-
tion have received considerably less atten-
tion, particularly from economists.
In this section we first consider in some
detail the question of whether or not dis-
. . . . ,.,,. . . . .
cr~m~nat~on exists. ~ nits Is an Important ~n-
quiry, since its resolution is necessary in
order to determine the overall context in
which employment segregation by sex takes
place. There is no point in seeking to de-
termine the role of segregation in producing
discriminatory pay differentials by sex if in
fact there is little evidence that such dis-
criminatory differentials exist. Second, we
explore the existing literature concerning the
role of occupational segregation in produc-
ing pay differentials and, more briefly, some
of what has been learned about the causes
of such segregation.
Discrimination and Earnings
A crude test of the relative merits of the
discrimination and human capital explana-
tions for sex differences in earnings is pro-
vided by an examination of the time series
trends in the sex pay differential. We first
briefly consider this time series evidence,
then move to a detailed discussion of the
more sophisticated cross-sectional analyses
ofthe extent of labor market discrimination.
As noted in the introduction, there has ac-
tually been some deterioration in the rela-
tive earnings position of women since the
mid-19SOs. It has frequently and incorrectly
been assumed that increases in the female
labor force participation rate over time are
indicative of declines in the average level of
experience of women workers due to the
impact of new entrants (Economic Report of
to President, 19741. In fact, as Mincer (1979)
explains, the female labor force grows not
only through "widening" (increases in the
flow of entrants or reentrants) but also through
"deepening" (decreases in the flow of exi-
ters). Ike impact on the average level of
experience of female workers depends on
the relative magnitude of these two flows.
In addition, since labor force entry tends to
be selective of female nonparticipants with
higher levels of previous labor force expe-
rience, and labor force exit tends to be se-
lective offemale participants with lower lev-
els of previous labor force experience, labor
turnover does not dilute average experience
levels as much as it might first appear (Blau,
1975, 19781.
Lloyd and Niemi (1979) present a variety
of evidence indicating that the trend has
been for women to remain in the labor force
longer and more continuously and that en-
trants make up a decreasing proportion of
the female labor force. They conclude that
"it appears . . . the work experience di~er-
ential between the sexes has narrowed in
the past twenty years" (p. 133~. Thus, female
participation trends do not seem to be re-
OCR for page 126
126
FRANCINE D. BLAU
sponsible for the widening pay gap. More-
over, they find that "over time, the gap be-
tween men's and women's educational
attainment has been eliminated and, among
young cohorts, it appears that women's pro-
pensity to enroll in college is roughly similar
to men's" (p. 1461. Men and women do con-
tinue to differ sharply in fields of speciali-
zation, although some progress has recently
been made in this area as well (Baker, un-
dated). Further, one may speculate that the
rising divorce rate has increased women s
incentives to invest in their labor-market-
related human capital.
While one would like better data, partic-
ularly on experience, it seems reasonable to
conclude that human capital factors do not
account for the widening pay gap between
men and women. This provides support for
the view that discrimination plays a role in
producing the differential. It is unlikely that
tastes for discrimination against women have
increases! during this period. However, as
we have seen, little decline occurred in the
degree of sex segregation in employment
during that time. If increases in the demand
for labor in female jobs did not keep pace
with increases in the supply offemale labor,
relative "crowding" in female jobs may have
worsened, exerting a downward pressure on
female wages relative to male wages. In-
creases in the real wages of women over the
period could have continued to induce in-
creases in female labor force participation
celery Paribas.
In addition, it may be argued that women
face substantial experience and training re-
quirements in their efforts to move into high-
level male jobs (Freeman, 19731. This makes
it difficult for equal employment opportu-
nity legislation to open the doors to such
jobs for older women. Further, younger
women may have had the opportunity to
incorporate new expectations of greater la-
bor force attachment over their life cycles
into their human capital investment deci-
sions to a greater extent than have older
women. It is true that younger women have
been increasing their earnings position rel-
ative to younger men. Between 1970 and
1981 the ratio of the median incomes of full-
time, year-round women workers to those
of men increased from 59 to 60 percent for
all women, but rose from 65 to 70 percent
among 25- to 34-year-olds (U.S. Dept. of
Commerce, 1980, 19821. Beller (this vol-
ume) also found that younger cohorts ex-
perienced greater declines in occupational
segregation than clid the work force as a
whole. Thus far, however, the modest gains
by younger women do not provide over-
whelming support for this view. Much will
depend on how this group fares in the next
few years. It is also important to point out
that if employers were willing to reevaluate
their traditional promotion ladders they might
find that many older women workers do have
the experience necessary for higher-level
positions.
During recent years, while women as a
group have ma(le little progress in advanc-
ing their earnings positions relative to men,
black women have advanced relative to white
women. Black women's median (full-time,
year-round) incomes have increased from 69
percent of those of white women in 1964 to
90 percent in 1981. Black men have also
gained relative to white men. Their median
full-time, year-round incomes rose from 66
percent of those of white men in 1964 to 71
percent in 1981 (Lloyd and Niemi, 1979;
U. S. Dept. of Commerce, 19821. The gains
in the relative incomes of blacks are partially
due to substantial increases in their relative
educational attainment but cannot be fully
explained by that factor (Brown, 1982~. They
may in part be due to the impact of equal
employment opportunity legislation. The
more rapid improvement in the relative in-
come position of black women (compared
with white women) than of black men (com-
parecl with white men) may reflect the large
number of entry-level positions in many
typically female jobs, in comparison with
the higher experience and training require-
ments in typically male jobs discussed above.
OCR for page 127
OCCUPATIONAL SEGREGATION ._
-
LABOR MARKET DISCRIMINATION
127
We now turn to a review of studies that
attempt to measure the extent of labor mar-
ket discrimination explicitly. The general
practice in empirically estimating the mag-
nitude of labor market discrimination against
a particular group, e.g., women, is to as-
certain the proportion of the sex differential
that is accounted for by differences in the
productivity-related characteristics of male
and female workers and to allocate the re-
sidual to discrimination. Discrimination may
be measured by the coefficient on a sex
dummy variable in an earnings regression
equation, in which case the impact of the
other explanatory variables on earnings is
constrained to be the same for each sex group.
More often, this constraint is relaxed by es-
timating separate earnings regressions for
sex or race-sex groups. In this case the por-
tion of the pay differential due to sex clif-
ferences in the returns to a given set of char-
acteristics (i.e., sex differences in coefficients,
including the constant term) is attributed to
discrimination; the portion of the pay dif-
ferential that is due to sex differences in
endowments of productivity-related char-
acteristics (i.e., sex differences in the means
of the inclependent variables) is attributed
to nondiscriminatory factors (Blinder, 19731.
There are various problems with this "re-
sidual" approach to measuring labor market
discrimination. Perhaps the most serious is
the specification problem. On the one hand,
conventional data sources do not allow for
the measurement of all productivity-related
characteristics. The absence of actual labor
market experience from the data sets uses!
in the early studies of sex discrimination is
a prime example of an important omitted
variable. Type (as opposed to amount) of
schooling, which varies greatly between men
ant! women, would be another example. If,
on average, males are more favorably en-
clowed with the characteristics measured by
these omitted variables, the extent of labor
market discrimination will be overestimated
because of imperfect controls for these omit-
ted factors. On the other hancI, group dif-
ferences with respect to some productivity-
related characteristics may reflect the indi-
rect effects of discrimination (Blinder, 19731.
For example, as discussed earlier, women may
be excluded from high-wage occupations be-
cause of their sex. Furler, if the endogeneity
of choice variables is taken into account, we
see that labor market discrimination may dis-
courage women's human capital accumulation
or alter its type. Measured labor market clis-
crimination is likely to be underestimated to
the extent that such factors representing other
dimensions of discrimination are controlled
for.
A related problem is the interpretation of
sex differences in the coefficients of earnings
regressions. For example, a smaller coeffi-
cient on labor force experience for women
may reflect their decisions to invest in less
on-thejob training than men do, as pro-
posed by human capital theorists, or dis-
crimination on the part of employers re-
sulting in less access to on-thejob training
opportunities. 15 Similarly, sex differences in
the returns related to marital status may re-
flect unmeasured differences in labor force
attachment between married men and
women (Polachek, 1975) or sex differences
in employer treatment of marital status that
is unrelated to productivity (e.g., the view
that married men deserve higher salaries
because they have families to support).
These problems of specification and in-
terpretation of coefficients reflect a more
fundamental problem. We would like to
measure the extent of labor market dis-
crimination a demand-side phenomenon.
But wages are influenced by both sup-
ply- and demand-side factors. The earnings
functions that are typically estimated are es-
sentially reduced-form equations, and thus
their coefficients may reflect the influence
i5 Further, one may question the basic premise of
the human capital model that upward-sloping experi-
ence-earnings profiles are indeed due to on-thejob
training. See, e.g., Medoff and Abraham (1980, 1981~.
OCR for page 133
OCCUPATIONAL SEGREGATION AND LABOR MARKET DlSCRIMlNATION
133
differences in the returns to marital status,
Hill (1979) uses explicit data on experience,
human capital investment and labor force
attachment from the 1976 PSID to explore
this issue further. She finds that, all else
equal, marriage has strong positive wage ef-
fects for (white and black) men, while the
effects of marriage on (white and black)
women's wages are not significantly differ-
ent from zero. Malkie! and Malkie! (1973)
and Osterman (1979) report similar findings
for the wage effects of marriage from studies
of sex differences in the wages of profes-
sional workers, also including good controls
for work experience and attachment. A sup-
ply-side explanation for these findings can-
not be entirely ruled out: given the tradi-
tional division of labor within the home,
married men may be more highly motivated
or hardworking than single men with similar
measured characteristics, while married
women may be less highly motivated or
hardworking than their single counterparts.
But, as Osterman points out, how do we
then explain the absence of a negative effect
of marriage on the earnings of women?
Moreover, Hill examined the effect of mar-
ital status and number of children on wages
as more explicit controls for experience, hu-
man capital investments, and labor force at-
tachment were added to the wage regres-
sions. She finds that the wage effect of marital
status among all race/sex groups remains quite
stable and concludes that marital status does
not serve as a proxy for these productivity-
related factors. If marital status is not serv-
ing as a proxy for these obvious and impor-
tant factors, it seems doubtful that it is serv-
ing as a proxy for more subtle traits like
motivation. However, Hill does find that
number of children is to some extent proxy
for these factors. Both Osterman and Hill
feel that employers may believe that mar-
ried men deserve higher salaries because of
their greater financial responsibilities. Given
traditional views of men's and women's eco-
nomic roles, they do not feel the same is
true of married women. Such a difference
in treatment, if it exists, would have to be
classed as discriminatory.
The evidence reviewed here strongly sug-
gests that labor market discrimination does
indeed play a role in producing the observed
male-female pay differential. While it is dif-
ficult to pinpoint the exact portion of the sex
pay gap due to discrimination, the findings
suggest that over half of the clifferential can-
not be explained by sex differences in pro-
ductivity-related factors. Some considera-
tions (e.g., omitted variables) suggest that
this may be an overestimate of the magni-
tude of discrimination. On the other hand,
other considerations (e.g., the impact of la-
bor market discrimination on the incentives
to acquire experience, training, etc.) sug-
gest that it may be an underestimate. Thus,
we are still left with fairly strong evidence
of the importance of discrimination.
Occupational Segregation and Earnings
Having determined the overall labor mar-
ket context in which employment segrega-
tion by sex takes place, we are now able to
turn to a consideration of the empirical evi-
dence regarding the role played by such seg-
regation in producing pay differences and a
consideration of some recent evidence on
the causes of such segregation. According to
the discrimination models considered earlier,
segregation may work to Tower women's earn-
ings because of a lesser provision of on-the-
job training and fewer incentives for worker
stability in female jobs (Arrow's perceptual
equilibrium model, institutional models) and/
or because of overcrowding. While these no-
tions suggest that it would be instructive to
look at the relationship between earnings
particularly the discriminatory pay gap and
segregation, there are three major problems
in arriving at an empirical estimate.
The first is a data problem. Most data
sources, even detailed census data, tend to
aggregate some male and female jobs into
apparently integrated categories (Hartmann
and Reskin, 19821. Further, insofar as men
OCR for page 134
134
FRANCINE D. BLAU
and women are segregated by firm within
occupational categories, aggregation across
firms will result in an underestimate of the
extent to which men and women are in seg-
regated work settings (Blau, 19771. The im-
pact of both of these factors is revealed in a
recent study by Bielby and Baron (this vol-
ume) of 393 California establishments. Us-
ing the employers' own job classifications,
they found that 51 percent of the firms were
completely sex-segregated with respect to
job classification: no men and women shared
the same job title. An additional 8 percent
of the firms were single-sex establishments.
The mean index of segregation of the re-
maining 41 percent of firms was 84.1. It has
been found that the portion of the sex pay
gap associated with occupational differences
is larger, the finer the occupational cate-
gories employed (Treiman and Hartmann,
19811. Thus, it seems reasonable to con-
clude that aggregation problems result in an
underestimate of the impact of employment
segregation on the sex pay gap.
The second problem is more conceptual.
The logical way to determine the impact of
occupational characteristics or categories on
pay, all else equal, is to control for sex or
to look within sex groups. Yet it seems pos-
sible that the existence of overcrowding in
female jobs may lower the wages of women
in male jobs. Even when women work in
male jobs their opportunity set may differ
from that of their male coworkers: the lower-
paying alternatives they face in the female
sector may reduce their supply price to the
firm. This is a potential wage spflIover effect
of overcrowding. Further, women may face
discrimination in the male sector that lowers
their relative wages there. Indeed, in Berg-
mann's original formulation of the over-
crowding model it is the exclusion of women
from male jobs due to discrimination that
causes the overcrowding of the female sec-
tor. It makes intuitive sense that women
remain concentrates! in female jobs because
they have little to gain by obtaining male
jobs. Thus, measuring the impact of occu-
pation on pay by contrasting the wages of
women in male ant! female jobs, celery par-
ibus, may result in an underestimate. On
the other hand, the internal labor market
(institutional) mode} suggests that when
women are able to obtain employment in
male jobs within a firm, they should be paid
at about the same rate as men. This implies
that pay comparisons of women in male and
female jobs can provide good estimates of
the impact of occupation on wages. How-
ever, since data are generally aggregated
over firms, women may earn less than men
do in male jobs if they work for low-paying
firms. Further, women may be segregated
by job level within the same occupational
category.
Judging the impact of occupation by com-
paring the wages of men in male and female
jobs does not appear to be satisfactory either.
A problem here is that men are not believed
to be discriminated against in or excluded
from male jobs, so the question arises as to
why they are employed in the female sector.
If it is because they have very strong non-
pecuniary (nonmonetary) tastes for female
jobs, then their wages may reflect a differ-
ential due to overcrowding. The pay differ-
ential between men in male and female jobs
may also reflect overcrowding if bad luck,
poor information, or job rationing in male
jobs (e.g., due to unions) are responsible for
the employment of men in female jobs. On
the other hand, men may work in female
jobs because they have found a niche there
that pays comparably with what they could
earn in male jobs, e.g., due to employment
in a high-paying firm or at a high level in
the occupation hierarchy. In that case a
comparison of men's wages in male and fe-
male jobs wfl} not reflect an overcrowding
differential.
These two considerations suggest that
empirical estimates may understate the con-
tribution of employment segregation to the
sex pay gap. A third point works in the op-
posite direction. Workers in higher-paying
jobs (or firms) may have unobserved char-
OCR for page 135
OCCUPATIONAL SEGREGATION AND LABOR MARKET DlSCRIMlNATION
acteristics that are associated with higher
productivity: what appear to be occupation
effects on wages may actually be due to
unobserved productivity differences among
workers.
The union-impact literature suggests some
fruitful alternative approaches for examining
the impact of crowding, since many analo-
gous problems arise in investigating that is-
sue. For example, papers by Kahn (1980)
and Flanagan (1976) suggest that one might
look at the effect on the wages of men and
women in male and female jobs of changes
over time or of differences across labor mar-
kets, in the degree of crowding. This type
of approach could provide an empirical es-
timate of the impact of crowding that takes
spillover effects into account. The selectivity
problem of comparing the wages of women
(or of men) in male and female jobs might
be overcome by using a technique devel-
opec} by Lee (1978) in his investigation of
the union-nonunion differential.
While existing studies may deal inade-
quately with the problems raised here, it is
still instructive to review the findings in this
area. Using data from the 1980 census, Trei-
man and Hartmann (1981) found that 35 to
39 percent of the earnings difference between
men and women was associated with sex dif-
ferences in the distribution of their employ-
ment among 479 detailed categories.28 Oc-
cupational differences appear to be a significant
factor in explaining the sex pay gap, even when
other productivity-related factors are con-
trolled for. For example, Oaxaca (1973a,b)
found that the inclusion of controls for major
occupation and industry and for cuss of worker
increased the portion of the sex pay gap ex-
plained from 20 to 37 percent in the case of
whites and from 6 to 39 percent in the case
of blacks. In this case job characteristics ac-
counted for some 20 to 35 percent of the dis-
criminatory pay gap. Using 1950 census data,
Sanborn (1964) was able to explain 43 percent
28 See also Chiswick et al. (1974~.
135
of the sex pay gap on the basis of controls for
such factors as detailed occupation, age, and
education.29 The greater magnitude of the ex-
plained differential in the Sanborn study than
in the studies of Fuchs (1971) and Oaxaca
(1973a,b) cited earlier, in which occupational
controls were not included, is an indication
of the importance of occupational category in
determining earnings. Further, using date from
the 1974 PSID and the 1967 NLS, England
(1981, 1982) found that, all else equal, the
percentage of females in the occupation is sig-
nificantly negatively related to female earn-
ings.30
Table 7-1 illustrates the impact of occupa-
tional category within an individual firm a
large fiduciary institution.3i In equation (1),
only controls for sex and race are entered into
the regression, thus providing an estimate of
the gross or unadjusted sex-race differentials.
Equation (2) includes controls for productiv-
ity-related individual characteristics but no
controls for occupational characteristics. Ibis
29 Including adjustments for even more narrowly de-
fined occupational categories from the BLS, as well as
sex differences in turnover, absenteeism, and work ex-
perience, Sanborn (1964) was able to explain 71 percent
of the pay gap. The problem with this portion of his
analysis is that he most probably engaged in double
counting. He assumed that the sex differences in age
and education that prevailed within the census cate-
gories also prevailed within the more detailed BLS
categories. Further, he adjusted within occupations for
estimates of aggregate sex differences in turnover, ab-
senteeism, and work experience. Leaving aside the
issue of endogeneity, labor quality differences between
men and women are likely to be considerably smaller
within occupations than in the aggregate, since it is
these traits that sort people into occupations. Indeed,
in the presence of discrimination women may be more
qualified than men in specific occupations. See Ham-
ilton (1973) for some evidence consistent with the latter
possibility.
30 See also Roos (1981), Ferber and Lowry (1976),
Cabral et al. (1981), Stevenson (1975), and Jusenius
(1977~.
3} This analysis was part of the statistical evidence
developed by Janice Madden and me in an employ-
ment discrimination case. Madden (1982) also provides
a discussion and analysis of these data.
OCR for page 136
36
FRANCINE D. BLAU
TABLE 7-1 Regression Analysis of the Salaries of Active Employees in 1978
(standard errors)
Dependent Variable: Natural Log of Annual Salary
Independent Variables (1) (2) (3)
Personal characteristics
Female
Black
Other minority
Education (highest grade completed)
Age (in years)
Age (squared)
Firm experience (in years)
Firm experience (squared)
Job characteristics
Hay points
Firm officer
Other exempt
Constant term
R square
F statistic
Number of employees
—O. 5659a
(0.0183)
_ 0.3573a
(0.0243)
—0.2091a
(0.0359)
9.7748
0.4156
476.0479a
2012
—O. 3236a
(0.0151)
—O. 1985a
(0.0185)
_ O. 0943a
(0.0267)
O. 09410a
(0.0035)
O. 0512a
(0.0042)
—O. 00059a
(0.00005)
O. 0258a
(0.0029)
—O. 00027a
(0.00010)
7.1928
0.6873
550.1990a
2012
—O. 0785a
(0.0083)
—O. 0948a
(0.0092)
_ O. 0459a
(0.0130)
O. 0176a
(0.0021)
O. 0268a
(0.0022)
—O. 00030a
(0.00003)
O. 0088a
(0.0014)
—O. 00018a
(0.00005)
O. 0007a
~o.ooool)
O. 3628a
(0.0132)
O. 2332a
(0.0116)
8.2253
0.9294
1806
a Significant at the 1 percent level on a two-tailed test.
gives the total effect of discrimination (oper-
ating both through unequal pay for equal work
and unequal access to higher-paying jobs).
Discrimination is estimated to account for 57
percent of the gross pay differential in the case
of women (controlling for race) and 45 to 56
percent of the gross pay differential in the case
of blacks and other minorities (controlling for
sex). Controlling for occupational character-
istics in equation (3) gives us an estimate of
pay differences between equally qualified male
and female (black and white) workers in sim-
ilar job categories. In this case the job char-
acteristics include hay points an employer
evaluation of the value ofthe job to the firm—
and two dummy variables indicating whether
the individual is an officer of the firm or is in
another managerial or professional occupation
(exempt from the Fair Labor Standards Act).
A relatively small proportion of the discrim-
inatory sex differential (controlling for race)-
24 percent (-0.0785/-0.3236) is due to
pay differences within similar occupational
categories. The remainder, 76 percent, is due
to sex differences in distribution among oc-
cupational categories within the firm. Occu-
pational differences explain somewhat less than
half of the discriminatory pay gap in the case
of blacks and other minorities (controlling for
sex).
There are some problems with these spec-
ifications. For one thing age rather than actual
labor market experience is used as an explan-
atory variable due to data availability. (The
OCR for page 137
OCCUPATIONAL SEGREGATION AND LABOR MARKET DISCRIMINATION
137
firm experience variable does, however,
measure actual firm experience.) However,
the studies reviewed earlier strongly suggest
that the discriminatory differential would per-
sist even if we were able to control for actual
labor market experience. For another, job
grade Way points) rather than occupational
category is employed, making this similar to
the type of investigation one would undertake
in a study of the issue of comparable worth.
But there are some advantages to the use of
hay points as an overall measure of job level
that cuts across male and female jobs. It over-
comes one of the practical problems with ef-
forts to ascertain the size of intraoccupational
sex pay differentials: paucity of data on one
sex group or another within a job category
due to the very sex segregation by occupation
that we seek to study.32 These results support
the notion that studies of the impact of oc-
cupation undertaken at the level of the firm
and utilizing job categories more closely ap-
proximating the job titles used by the em-
ployer will reveal a greater impact of job cat-
egory on wages than aggregate analyses.
The Causes of Occupational Segregation
As discussed earlier, the human capital
model provides an explanation for occupa-
tional segregation by sex in terms of wom-
en's optimizing behavior, given the tradi-
tional division of labor by sex within the
fam fly. Polachek (1979, 1981) provides some
support for this view when jobs are cate-
gorized according to variants of the census
major occupational groups. The problem with
his approach is that these major occupa-
tional categories combine predominantly
male and predominantly female jobs (Eng-
land, 19821. England (1981, 1982) explicitly
examines whether women's earnings pat-
terns in predominantly female and predom-
32 Employer job evaluation schemes may, however,
understate the relative value of predominantly female
occupations (Treiman and Hartmann, 1981~.
inaptly male occupations differ in the way
predicted by the human capital model. She
finds that the earnings of women in pre-
dominantly female occupations do not show
lower rates of either depreciation or appre-
ciation than do the earnings of women in
occupations employing more males.33 Fur-
ther, she finds women who have discontin-
uous work histories are no more likely to be
in predominantly female occupations than
are women who have been employed more
continuously. Indeed, since she finds that
women earn less in female jobs at all levels
of experience, she concludes that "the evi-
dence does not support the contention of
human capital theorists that women maxi-
mize lifetime earnings by choosing female
occupations" (England, 1981, p. 18~.
If we provisionally conclude that the hu-
man capital analysis of occupational choice
discussed above does not explain occupa-
tional segregation, at least at the aggregate
level, what does? Many potential candidates
remain, ranging from premarket discrimi-
nation (e.g., by families through the social-
ization process, or by schools through the
actions of teachers, guidance counselors, or
admissions committees) to the exclusionary
practices of employers (due to their own
tastes, statistical discriminations, and/or the
tastes of employees or customers). Clearly,
considerable additional work needs to be
done to narrow the field and/or to attach
relative weights to these competing expla-
nations.
Pay Differentials Within Occupations
The relatively flat earnings profiles of
women in female jobs are consistent with
33 See also Beller (1982~. She finds that when one
examines detailed (three-digit) census occupations, the
evidence for the human capital model is mixed in that
the expected signs on the labor supply variables are
not always obtained. King (1977) finds little evidence
of flatter age earnings profiles for women in female as
compared with male professions.
OCR for page 138
138
FRANCINE D. BLAU
the notion advanced in the institutional view
and implied by Arrow's notion of perceptual
equilibrium that employers would structure
female jobs to fit the average perceived
characteristics of women workers. How-
ever, the finding that women in male jobs
also have relatively flat earnings profiles might
at first appear inconsistent with the notion
that the internal labor market mandates equal
pay for equal work by sex. However, it should
be noted that the census categories are ag-
gregated across job levels and firms. Thus,
firms may pay women and men in the same
job category at roughly the same rate, but
promote women more sIowly.34 Further, it
may be that women and men in the same
census job category are segregated by firm.
Blau (1977) examines the extent of employ-
ment segregation by sex within occupational
categories and its relationship to intraoc-
cupational pay differentials within the con-
text of an institutional model. Her findings
suggest that pay differentials between men
and women in the same occupational cate-
gory may reflect hiring discrimination by
firms.
marily sought by and attracted to the higher-
wage establishments, while female workers
for the most part find employment in the
lower-paying firms, which, regardless of their
preferences, are less able to compete for
male labor.
Blau tests this mode} using unpublished
1970 wage data from the Bureau of Labor
Statistics on extremely narrow, white-collar
occupational categories (e.g., accounting
clerk, class A) in three northeastern cities.
She argues that within such narrow cate-
gories male and female labor is likely to be
fairly homogeneous.35 Blau finds that within
occupations men and women are segregated
by establishments to an extent in excess of
what would be expected on the basis of
chance. Within firms, occupational pay dif-
ferences are found to be relatively small,
and sex pay differentials within occupations
are primarily due to differences in pay rates
among (rather than within) firms.36 Further,
men tend to earn less when they work with
women, which is counter to what we would
expect on the basis of the Becker mode! if
discriminatory tastes were located in em-
Blau postulates that institutional and mar- ployees. -
ket forces determine a wage hierarchy of Blau finds evidence of a wage hierarchy
firms within the local labor market that is
consistent across occupational categories. She
argues that, while employer tastes for dis-
crimination against women are fairly wide-
spread, the ability to exercise them is con-
strained by the firm's position in the wage
hierarchy. That position is determined by
a variety of factors and cannot easily be al-
tered to accommodate employer prefer-
ences regarding the sex composition of spe-
cific occupational categories. ~us, in each
occupational category male workers are pri-
of firms that is consistent across occupations
and sex groups. Controlling for occupational
mix, the representation of women in the
firm is found to be consistent across occu-
pations and inversely related to the wage
standing of the firm. Note that these find-
ings also conflict with the Becker model. In
the case of employee preferences it is not
expected that men will earn more when they
work with relatively fewer women. In the
case of employer preferences it is not ex-
pected that the firms that hire relatively the
34 Note that such a sex difference by job level would
not support the human capital view in that it would
not be economically rational for women to opt to take
the lower-paid training positions, but not to reap the
gains of moving up the job ladder. For findings sug-
gesting that women have lower promotion probabili-
ties, see Duncan and Hoffman (1979), Cabral et al.
(1981), and Malkiel and Malkiel (1973~.
35 See footnote 29.
36 For other studies reporting differences in the dis-
tribution of men and women by firm that are associated
with pay differentials, see Buckley (1971), McNulty
(1967), Bridges and Berk (1974), Talbert and Bose (1977),
Allison (1976), and Dussault and Bose-Lizee (1980~.
OCR for page 139
OCCUPATIONAL SEGREGATION _
LABOR MARKET DISCRIMINATION
139
fewest women (presumably the most dis-
criminatory firms) will pay women the high-
est wage rates.37
CONCLUSIONS
Various explanations have been offered for
the pay and occupational differences between
male and female workers. Some emphasize
labor market discrimination, while others, most
notably the human capital model, focus on
the voluntary choices of women. A review of
the empirical literature strongly suggests that,
all else equal (including fairly refined meas-
ures of work experience and labor force at-
tachment), women do earn less Han men.
This suggests that labor market discrimination
does indeed play a role in producing the lower
earnings of women. However, we lack a widely
accepted economic theory of the role of oc-
cupational segregation in producing this dif-
ferential and of the persistence of sex discrim-
ination in the labor market over time in the
face of competitive forces. Perhaps it is time
now to devote less of our empirical efforts to
ascertaining the existence of discrimination and
more toward determining which mode! of dis-
crimination is most consistent with the data
and the mechanisms by which these discrim-
inatory outcomes are produced. On the basis
of the existing evidence it appears that sex
segregation in employment is an important
mechanism for producing sex differences in
earnings and that the occupational differences
between men and women do not seem to be
consistent with optimizing behavior on the
part of women. However, considerably more
work is needed to understand the causes of
sex differences in occupational distributions
fully and to determine the role of such oc-
37 Note that the comparisons made in the text be-
tween the results expected on the basis of the Becker
and institutional models rest fairly heavily on the as-
sumption that labor is fairly homogeneous within these
detailed occupations. Otherwise, variations in labor
quality might account for these interfirm differences in 1973
pay rates.
cupational differences in producing male-fe-
male pay clifferentials. One area of particular
concern is the issue of the impact of crowding
in female jobs on the wages of women in male
jobs. Finally, the question of the indirect ef-
fects of discrimination on the qualifications of
women (and minorities) is another area upon
which future research could fruitfully be fo-
cused.
ACKNOWLEDGMENTS
Portions of this chapter draw on my work
entitled "Discrimination Against Women:
Theory and Evidence," in William A. Dar-
ity, Jr., e(l., Labor Economics: Modern Views
(Boston: Kluwer-Nijhoff, 1984~. I am grate-
ful to the publisher for granting permission
for the reproduction of some of that material
here.
I am grateful for the comments and sug-
gestions of Barbara Reskin, William Darity,
Ir., Katherine Abraham, Andrea Beller,
Barbara Bergmann, Charles Brown, Paula
England, Marianne Ferber, Claudia Gol-
din, Joan Huber, Robert Hutchens, Law-
rence Kahn, Michael Reich, Harvey Rosen,
and two anonymous referees. I am indebted
to Susan Schwochan for excellent research
assistance.
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Representative terms from entire chapter:
labor force
