Econ 1740: US Economic History
Fall 1999
Women in the Labor Market in the 19th and 20th Centuries

I. Labor Force Participation:

A. Probably the fundamental difference between men and women with regard to their economic behavior, in the era of wage work and manufacturing, is differences in labor force participation (LFP).

B. LFP 1890-1980, by marital status and race- see Table 1.

C. Life cycle and cohort patterns - see Table 2.

1. Over the life cycle, married women’s LFP rises with age up to age 50 or so.

2. Across cohorts, married women’s LFP rises at all ages. Causes of this increase? "Supply-side" factors (new ideas about women's roles, greater education, fewer kids) and "demand-side" factors (declining availability of single female workers).

D. Some general implications:

1. Single women’s LFP is higher than married women’s: women have shorter careers.

2. Because rates rise across cohorts, women’s expectations about their work lives will be uncertain.

II. Gender Segregation and Its Relationship to Labor Force Participation Patterns:

A. Sharp segregation of men and women into different jobs, apparently related to method of pay - piece rate vs. time rate. See Table 3. Explanation?

1. Motivation: Worker effort in time rate jobs is often motivated by "deferred pay," promotion, etc. These methods are unappealing for (and don’t work for) workers who expect to be around a short time. Worker effort in piece rate jobs is motivated by immediate reward - better incentives for (and more appealing to) short-time workers.

2. Costs of training inexperienced workers: Time rate jobs typically involve "team work," which makes training new workers expensive. In piece rate jobs, the worker pays for inexperience.

3. Examples - Cigar making, paper making.

III. Earnings:

A. Ratio of women’s wages to men’s wages, for the whole economy, for the last 100 years - see graph.

B. Definition of wage discrimination: different treatment (in this case, different pay), for workers who are identical in terms of productivity, but who differ in some irrelevant way - like gender, or race.

1. Some of the pay gap between men and women reflects differences between them that might be related to productivity - like differences in experience. Discrimination relates to pay differences left over after we account for the impact of experience differences and other similar issues.

2. Late 19th and Early 20th c. manufacturing: about a 45% pay gap between men and women.

a. Characteristics which might explain female-male gap: average male has 3 times the total work experience of the average woman (about 15 years vs. 5), 3 times the years spent in current occupation (10+ yrs to 3+), and 1.5 times the time spent in current occupation with current firm (4 to 2.5).

b. Correcting for these differences and some other, similar factors, we find that about two-thirds of the male-female pay gap is explainable with worker characteristics, and about one third is left over as "discrimination." Another way of saying this is that discrimination alone would have produced a pay gap of about 15% (one third of the total 45% gap) between men and women in late 19th and early 20th century manufacturing.

3. 1988 study for the nation as a whole: male-female pay gap around 35 points.

a. Characteristics: Full time work experience is about 17 years for men, 13 for women. Education is essentially identical at 13.4 years.

b. Characteristics explain about two fifths of the gap (essentially all due to experience and occupation), with about three fifths of the gap due to "discrimination." This means that discrimination alone would have caused a gap of about 21% (three fifths of 35%) between men's and women's pay in 1988.

C. SO, at any point in time, a lot of the male-female wage gap comes from different characteristics. As characteristics have become more similar, the pay gap has narrowed, but an apparent discriminatory gap of 15 to 20 percent remains.

1. Problems in measuring discrimination, arising from problems in measuring worker ability.
Table 1: Female Labor Force Participation By Marital Status and Race
  1890 1900 1910 1920 1930 1940 1950 1960 1970 1980
Total 18.9 20.6   23.7 24.8 25.8 29.5 35.1 41.6 51.1
Married 4.6 5.6   9.0 11.7 13.8 21.6 30.6 39.5 50.1
Single 40.5 43.5   46.4 50.5 45.5 50.6 47.5 51.0 61.5
                     
White 16.3 17.9   21.6 23.7 24.5 28.5 34.2 40.9 50.9
Married 2.5 3.2   6.5 9.8 12.5 20.7 29.8 38.5 49.3
Single 38.4 41.5   45.0 48.7 45.9 51.8 48.5 52.1 64.2
                     
Nonwhite 39.7 43.2   43.1 43.3 37.6 37.8 42.7 47.3 52.1
Married 22.5 26.0   32.5 33.2 27.3 31.8 40.5 50.0 59.0
Single 59.5 60.5   58.8 52.1 41.9 40.0 39.7 43.6 49.4
From Goldin, Understanding the Gender Gap, Table 2.1

Table 2: Labor Force Participation Rates for Married Women, By Race, Age, and Birth Cohort
  White Women Aged:   Nonwhite Women Aged:
Birth Year: 15-24 25-34 35-44 45-54 55-64   15-24 25-34 35-44 45-54 55-64
1896-1905 8.2 11.5 13.8 22.2 24.6   30.4 35.9 30.5 32.9 33.7
1906-15 13.3 16.7 25.3 38.6 34.1   29.9 31.4 38.7 47.3 41.2
1916-25 14.7 21.0 35.4 46.7 34.1   23.7 34.8 48.9 54.5 42.0
Goldin, Understanding the Gender Gap, Table 2.2

Table 3: Gender Segregation and Method of Pay
       
A. Overall share of work force paid piece rates, 1890:
       
  Men: 8-13%    
  Women: 37-47%    
       
B. Method of pay in male-intensive and female-intensive industries:
       
  % Male % Female % on Piece
Corsets 19 81 60
Men's Furnishings 26 74 60
Hosiery and Knits 33 67 50
       
C. Pay of men and women within industry:
       
  % of Men % of Women  
  on Piece on Piece  
Boxes 23 56  
Cotton Goods 32 73  
Fruit and Vegetable Canning 20 50  
Hats and Caps 55 70  
       
Source: Goldin, Journal of Labor Economics 1986