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Atlanta Fed Working Papers


Why Choose Women’s Work If It Pays Less? A Structural Model of Occupational Choice

M. Melinda Pitts
Working Paper 2002-30
December 2002

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This paper controls for the selection bias associated with occupational choice and the labor force participation decision in estimating the wage penalty for working in female-dominated occupations. Using data from the May 1979 and the April 1993 supplements to the Current Population Survey, the author finds that women working in female-dominated occupations have similar or higher expected wages in their chosen occupation compared to nonfemale-dominated occupations. This result indicates that there is efficient matching between occupations and skills for women in the labor force and refutes the theories of occupational segregation or crowding as determinants of the gender wage differential.

JEL classification: J24, J16

Keywords: occupational choice, gender wage differential, selection bias


The author gratefully acknowledges Brian Amour, Robert Clark, Julie Hotchkiss, Ann McDermed, Bob Moore, Paula Stephan, and Laura Taylor. The views expressed here are the author?s and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the author?s responsibility.

Please address questions regarding content to M. Melinda Pitts, Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, Georgia 30309-4470, 404-498-7009, melinda.pitts@atl.frb.org.

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