MALE‐FEMALE WAGE DIFFERENTIALS IN THE UNITED STATES

The increasing importance of women as participants in the labor force during the last few decades has led to an increasing amount of research effort to identify, measure, and explain male‐female wage differentials (see, for example, Sanborn, 1964; Bayer and Astin, 1968; Fuchs, 1971; Cohen, 1971; Manche, 1971; Suter and Miller, 1971; Sawhill, 1973; Hamilton, 1973; Gwartney and Stroup, 1973; Ferber and Lowry, 1976). Owing to data limitations that led to specification errors and/or errors in variables, the results of most of the analyses of male‐female wage differentials may be biased, as the authors themselves point out. Also, analysts who used Ordinary Least Squares (OLS) regression techniques failed to account for the simultaneity between the wage, or earnings, variable and certain of the explanatory variables in regression. In addition, since some of the explanatory variables usually included in regression have different magnitudes or signs for men and women, past analyses that contained a sex dummy variable to deduce wage differentials were misspecified.