Why Are the Returns to Schooling Higher for Women than for Men?

Abstract

Many studies have found that the impact of schooling on earnings is greater for females than for males, despite the fact that females tend to earn less, both absolutely and controlling for personal characteristics. This study investigates possible reasons for this effect, using data from the National Longitudinal Survey of Youth 1979–. One explanation is that education appears to have a double effect on the earnings of women. It increases their skills and productivity, as it does with men, and in addition it appears to reduce the gap in male and female earnings attributable to factors such as discrimination, tastes, and circumstances. The latter appear to account for about half of the differential in the returns to schooling.