How the Pay Gap Between Men and Women Starts Small and Gets So Much Bigger

A new analysis shows that the wage differential expands over time

Views Of Harvard University And The Massachusetts Institute Of Technology

Students look over a map on the campus of the Massachusetts Institute of Technology in Cambridge, MA, Monday June 29, 2015.

Photographer: Victor J. Blue

Men earn only about 3 percent more than women among recent graduates, yet that gap widens substantially with age, New York Federal Reserve economists find. 

Looking at workers between the ages of 22 and 27 with at least a bachelor's degree in the years 2009 to 2013, researchers find that women earn nearly as much -- and in some fields, more than -- their male counterparts, controlling for factors including age, race and college major. But don't celebrate gender equality just yet.

First of all, most women still face a pay disadvantage at the start of their career, and that doesn't stem from the commonly invoked explanation that men tend to choose to work in higher-paying professions compared with women (the researchers accounted for that). What's more, even women who out-earn men early on don't hold onto the lead. By mid-career, "males earn a more substantial premium in nearly every major," the researchers found. For college graduates who were between 35 to 45,  men earned about 15 percent more than women.

The graphic below shows majors in which women out-earn men at the start of their careers, and how the gender pay gap evolves over time.  

While these are two different cohorts of people compared at the same period in time, other studies have followed groups as they age and have found that the gender pay gap changes with time. It's not clear exactly what's causing it to widen, but the New York Fed researchers put forth some theories. It could be that sex discrimination somehow comes into play more significantly as women age, or it could be tied to taking time off for family life. 

"When we look at the outcomes of young college graduates, this group primarily contains single people without children, while the mid-career group includes a significant number of men and women with children," the researchers write. "Women are more likely than men to spend time out of the labor force to bear and raise children."

Regardless of what's causing women to achieve equality early in life only to lose it as they progress, the researchers say that "as we grapple with the issue of gender pay equity, it is vital that we continue to examine these trends in more detail so that we can better understand their sources."

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