Fortin, Nicole M. 2008. “The Gender Wage Gap among Young Adults in the United States: The Importance of Money versus People.” Journal of Human Resources 43(4): 884–918.
Using two single-cohort longitudinal surveys, the NLS72 and the NELS88, I investigate the impact of four noncognitive traits—self-esteem, external locus of control, the importance of money/work and the importance of people/family—on wages and on the gender wage gap among these young workers. I find that gender differences in these noncognitive factors, especially the importance of money/work, have a modest but significant role in accounting for the gender wage gap. Methodologically, this paper proposes a correction to the Oaxaca-Blinder-Ransom decomposition that results in a truly decomposable approach compatible with the simple pooled regression that includes a gender dummy.
Nicole Fortin is professor of economics at the University of British Columbia and a fellow of the Canadian Institute for Advanced Research (CIFAR). She would like to thank Francine Blau, David Card, Peter Dolton, Thomas Lemieux, Markus Mobius, Nathaniel Wilcox, anonymous referees, and seminar participants at the 2002 and 2006 AEA Meetings, at the 2005 SOLE Meetings, at UC-Berkeley and at the CIFAR Workshop on Social Interactions, Identity and Well-Being for helpful comments on this and earlier versions of the manuscript. The early stages of the project benefited from Michael Coelli’s diligent research assistance. The data used in this article can be obtained beginning May 2009 through April 2012 from Nicole Fortin, Dept. of Economics, UBC, nifortin@interchange.ubc.ca. Financial support was provided by SSHRC Grants #410-99-0959 and #501-2002-0118.