The impact of changing employment opportunity on gender and ethnic earnings inequality

Abstract The unprecedented increase in the number of women entering the labor force has accompanied the transformation of the American economy from a predominantly goods-producing to an increasingly service-oriented economy. This paper investigates how the expansion and transformation of employment opportunities affected the structured wage inequality between men and women of differing racial and ethnic origins. Our analyses identify in the matrix of occupations and industries where men's and women's employment has increased most rapidly between 1970 and 1980 and define the characteristics of jobs in those growth sectors in terms of current earnings by sex. Further, we identify which employment shifts—occupational recomposition within industries or industry growth and decline—are most strongly related to current wages, and how the earnings impacts differ between men and women of differing racial and ethnic origins. Finally, we address potential consequences of economic transformation for long-term equity in wage determination.