THE IMPACT OF MARRIED WOMEN. AND RELATED FACTORS ON THE DISTRIBUTION. OF FAMILY EARNINGS Dissertation for the Degree of Ph. D. MICHIGAN STATE UNIVERSITY ROBIN LYNN BARTLETT 19-74 9 .n.»c....’.m' This is to certify that the thesis entitled THE IMPACT OF MARRIED WOMEN AND RELATED FACTORS ON THE DISTRIBUTION OF FAMILY EARNINGS presented by Robin Lynn Bartlett has been accepted towards fulfillment of the requirements for Ph. D. degree in Economics Major professor Date February 22, 1974 0-7639 ‘7.:‘:‘ “Iran"mfgsfirg I BUOI BINDFRY INC 9 r as r (was III SPRINGPORI Amman ABSTRACT THE IMPACT OF MARRIED WOMEN AND RELATED FACTORS ON THE DISTRIBUTION OF FAMILY EARNINGS BY Robin Lynn Bartlett The purpose of this study was to examine some of the factors that affect the distribution of aggregate family earnings; that is, whether certain factors make the distribution of aggregate family earnings more or less disperse. Amang the factors that were suggestions and extensions of the current literature were the marital labor force participation rates, relative hourly earnings between all females and males in the labor force, the relative number of hours supplied between males and females in the labor force, relative hourly earnings between wives and husbands, and the relative number of hours supplied between husbands and wives. In order to construct a family earnings distribution, and to avoid the heroic assumptions that would have to be made to bridge the gap be- tween a family earnings distribution and a family income distribution, the core population of all husband and wife families was chosen. The necessary data were taken from various published and unpublished sources of information gained from the Current Population Survey. The data were in three major groupings: (l) marital labor force participation pairings -- that is, all the possible combinations of husband and wife occupational pairings if they were employed as well as unemployed or not in the labor (7‘56? Robin Lynn Bartlett fbrce employment statuses; (2) hourly earnings and hours worked by sex and occupation; and (3) the marital labor force participation pairings as in (1). The time period considered was between 1962 and 1971. Using Gini coefficients to determine whether or not the factors men- tioned above had an equalizing or disequalizing impact on the distribution of family earnings, the fellowing results were obtained. First, the in- creased labor force participation rates of married women as reflected in the increased marital labor force participation rates had a substantial disequalizing impact on the distribution of family earnings. This dis- equa1izing impact was somewhat offset by the equalizing influences of the other four factors. The increase in the relative hourly earnings between all females and males had the greatest equalizing impact of the four. The net result was the fact that relative income dispersion in- creased between 1962 and 1971. THE IMPACT OF MARRIED WOMEN AND RELATED FACTORS ON THE DISTRIBUTION OF FAMILY EARNINGS BY Robin Lynn Bartlett A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Economics 1974 Copyright by Robin L. Bartlett 1974 TO THE BARTLETT CLAN: C.D. MARCELLA DAN LINDA BILL SHARON MIKE BECKY ROY BERNIE AND GRAM ACKNOWLEDGMENTS I wish to thank the following people: Professor Robert Rasche, Chairman of the Committee, for crystalizing the initial ideas and for patiently reading the numerous drafts of each chapter; Professor Collette Moser and The Center for Rural Manpower and Public Affairs for financial support; Professor Maurice Weinrobe for his help and supervision; Professor Daniel Hamermesh for willingness to speedily read and critique various drafts; Professor William Haley for his assistance with various statistical problems; Various friends who had their own special input; Jacque Grossman who programmed a substantial portion of the work; Linda Peppard who read countless numbers; Jean Carlson who edited critical sections; Jeanette Barbour and Betty Kronemeyer who typed the first and last drafts; Pam Japinga who made the coffee breaks enjoyable and gave support before and during the writing of this thesis; Those in my office -- Robert Leekley, Evelyn and Mark Fallek, and Jan Palmer. iii TABLE OF CONTENTS LIST OF TABLES I O O O O 0 C O O O O O O O O O O O O O O O O O O O 0 LIST OF FIGURES O O O O O O O O O O O O O O O O O O O O O O I O O 0 CHAPTER 2 LUMP-J 000 4.0 CHAPTER 3 NH 00 Introduction. . . . . . . . . . . . . . . . . . . . . . . Some Suggestions From the Literature. . . . . . . . . . . The Model . . . . . . . . . . . . . . . . . . . . . . . . The Outline of This Study . . . . . . . . . . . . . . . . RELATIVE HOURLY EARNINGS AND HOURS WORKED BETWEEN ALL MALES AND FEMALES IN THE LABOR FORCE . . . . . . . . . . Introduction. . . . . . . . . . . . . . . . . . . . . . . Aggregate Earnings. . . . . . . . . . . . . . . . . . . . The Data-Sources, Comparability, an Alterations. . . . . 3.1 The CPS. . . . . . . . . . . . . . . . . . . . . . . 3.2 Sources. . . . . . . . . . . . . . . . . . . . . . . 3.3 Alterations. . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . AGGREGATE TRENDS AND THE IMPORTANCE OF RELATIVE CHANGES I N THE LABOR FORCE O O C O O C I O O O O O O O O O O I 0 Introduction. . . . . . . . . . . . . . . . . . . . . . . Aggregate Trends in Earnings, Hours, and Wages. . . . . . 2.1 Earnings and Wage or Salary Income . . . . . . . . . 2.2 The Relative Quantity of Labor Supplied. . . . . . . 2.2.a The Quantity of Labor Supplied by Occupations 2.2.b The Relative Quantity of Labor Supplied by Occupations . . . . . . . . . . . . . . . . . 2.2 c The Quantity of Labor Supplied by Industries. 2.2.d The Relative Quantity of Labor Supplied by Industry. . . . . . . . . . . . . . . . . . . 2.3 Hourly Earnings and Wage Rates . . . . . . . . . . . 2.3.a Hourly Earnings Rates by Occupation . . . . . 2.3.b Relative Hourly Earnings by Occupation. . . . 2.3.c Wage Rates by Industry. . . . . . . . . . . . 2.3.d Relative Wage Rates by Industry . . . . . . . 2.4 Women's Bureau Data and Their Updates. . . . . . . . iv vi I‘\JUlI'-‘I-J 14 14 14 23 23 24 28 3O 31 31 31 31 33 34 39 42 45 47 48 50 5] 51 52 3.0 The Importance of Relative Quantities of Labor Supplied and Relative Remuneration Rates Between Females and Males . . . . . . . . . . . . . . . . . . . . . . . . . . 55 4.0 Occupational Shifts in the Labor Force. . . . . . . . . . 58 4.1 Shifts in Occupations. . . . . . . . . . . . . . . . 58 4.2 The Impact of Occupational Shifts. . . . . . . . . . 60 5.0 Summary and Conclusions . . . . . . . . . . . . . . . . . 62 CHAPTER 4 AGGREGATE TRENDS AND THE IMPORTANCE OF RELATIVE HOURLY EARNINGS AND HOURS WORKED BETWEEN HUSBANDS AND WIVES IN TIE ECONOMY O I O O O C C C C O C O C . C O C O O C C O O 64 1 0 Introduction. . . . . . . . . . . . . . . . . . . . . . . 64 2.0 Aggregate Earnings of All Husband and Wife Families . . . 64 3 0 The Data - Sources and Alterations. . . . . . . . . . . . 69 3.1 Sources. . . . . . . . . . . . . . . . . . . . . . . 69 3.2 Alterations. . . . . . . . . . . . . . . . . . . . . 69 4.0 Relative Hourly Earnings and Hours Worked Between All Husbands and Wives in the Economy . . . . . . . . . . . . 70 5.0 A Conditional Probability Distribution of Husbands and Wives . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.0 Summary and Conclusions . . . . . . . . . . . . . . . . . 81 CHAPTER 5 THE CONTRIBUTIONS OF MARRIED WOMEN TO AND THE EFFECT OF RELATED FACTORS ON THE DISTRIBUTION OF AGGREGATE FAMILY EAm INGS . C C O I O O O O O O C O O O O O O O O O O O O 8 3 Introduction. . . . . . . . . . . . . . . . . . . . . . . 83 Aggregate Family Earnings and Its Distribution. . . . . . 85 The Impact of Related Factors on the Distribution of Family Earnings . . . . . . . . . . . . . . . . . . . . . 95 3.1 Adjusted Gini Coefficients for Components of Aggregate Family Earnings. . . . . . . . . . . . . . 95 3.2 Adjusted Gini Coefficients for Related Factors . . . 98 (UNI-J 0 000 CHAPTER 6 A SUMMARY OF FINDINGS AND CONCLUSIONS WITH SUGGESTIONS FOR POLICY AND FUTURE RESEARCH . . . . . . . . . . . . . 101 A Summary of Findings and Conclusions . . . . . . . . . . 101 Policy Implications . . . . . . . . . . . . . . . . . . . 106 Further Research. . . . . . . . . . . . . . . . . . . . . 106 b) N I-‘ O O O 0 APPENDIX A. O O O O O O O O O I O O O O O O O O O O O O O O O O O O 108 APPENDIX B. O O O O 0 O O O O O O O O O O O O O O O O O O O O O O O 132 LIST OF REFERENCES. 0 O O O O O O O O O O O O O O O 0 O O O O O O O 134 TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE 10 11 12 13 LIST OF TABLES Family Earner Patterns for All Husband and Wife Families in 1971 A Comparison of Median and Mean Incomes The Ratio of Aggregate Female Earnings to That of Males and the Ratio of Aggregate Wage or Salary Income of Females to That of Males, EFt/EMt, 1962 to 1971 The Relative Number of Annual Hours Supplied by All Males to That Supplied by All Females From Occupational and Industrial Categories, Hm/HE, 1962 to 1971 Average Annual Percentage Changes in pation, 1962 to 1971 Selected Variables by Occu- Average Annual in Selected Relative Variables By Occupation, Percentage Changes 1962 to 1971 Average Annual in Industry, 1962 Percentage Changes to 1971 Selected Variables by Average Annual Percentage Changes in Selected Relative Variables by Industry, 1962 to 1971 The Ratio of Hourly Annual Earnings or Wage Rates Between Females and Males, Wf/Wfi, Using Aggregate Persons' Data, 1962 to 1971 The Ratio of Aggregate Female Earnings to That of Males and the Ratio of Aggregate Wage or Salary Income of Females to That of Males, EFt/EMt, Using Weighted Averages, 1962 to 1971 of 1962 The Relative Aggregate Median Annual Wage or Salary Income Full-Time, Year-Round Females and Males, WSFTE/WSFTS, From to 1971 of Occu- The Relative Aggregate Annual Median Wage or Salary Income All Wbrkers Between Females and Males (WSE/WSE) Across All pations From 1962 to 1971 The Relative Aggregate Median Annual Wage or Salary Income of Full-Time, Year-Round Workers (WSFTE/WSFTE) andlnl Workers (WSE/WSE) For All Females and Males, Industrial Data, 1962 1971. to TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Relative Importance of the Variance in the Percentage Change of Hfi/HE, WE/Wfi, and the Cov (Hg/HE, WE/Wfi) in Explaining the Vari— ance of EF /EMt, From 1962 to 1971 Laspeyres and Paasche Indices of Hourly Remunerations, Annual Remunerations by Sex for Occupations and Industries From 1962 to 1971 A weighted Average of Relative Annual and Hourly Remunerations Between Females and Males for All Occupations and Industries, From 1962 to 1971 The Ratio of EWt/EHt , For Aggregate Wives' Earnings to That of Their Husbands', A11 Husband and Wife Families, From 1962 to 1971 The Ratio of Aggregate Wives' Earnings to That of Their Husbands', EWt/EHt, for Families in Which both Husband and Wife work, From 1962 to 1971 The Relative Number of Hours Supplied by Husbands to That Supplied by Wives, Hfi/Hfi, for All Husband and Wife Families and for Those in Which Both WOrked, From 1962 to 1971 Relative Hourly Earnings Between Wives and Husbands, WS/Wfi, for All Husband and Wife Families and for Those in Which Both WOrked, From 1962 to 1971 The Relative Importance of the Variance in the Percentage Change of (Hg/HS), (wqé/wfi), and the mung/Hg, wg/wg) in Explaining the Variance of EW /EHt, From 1962 to 1971 Laspeyres and Paasche Hourly Earnings Indices for All Wives and All Husbands, From 1962 to 1971 Weighted Averages of the Relative Hourly Earnings Between All Wives and Husbands, From 1962 to 1971 The Occupational Distribution of All Females, A11 Working Wives A11 Males and All WOrking Husbands In 1971 By Percentage of Totals in Each The Conditional Probability Distribution of All Husband and Wife Families, 1962 to 1971 Aggregate Family Earnings, AEFAMt, and Husband and Wife Families in Thousands, From 1962 to 1971 . . . t Gini Coeffic1ents for Aggregate Family Earnings, AEFAM , From 1962 to 1971 Aggregate Family Earnings and Hours Worked by Quintile, In 1962 and 1971 vii TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE 29 30 31 32 33 The Percentage of Wives in Particular Occupations Within Each Quintile in 1962 and 1971 The Actual Gini Coefficients for Aggregate Family Earnings, AEFAMt; For All Husbands' Earnings, EH and For All Wives' Earnings, Ew ; From 1962 to 1971 . . t The Gini Coefficient for Aggregate Family Earnings, AEFAM , the Adjusted Gini Coeff'cients for Constant Marital Labor Force Parti- cipation Rates, IjN ; for Constant Hours worked Per Year, H; and for Cbnstant Hourly Earnings, fi; From 1962 to 1971 . . t; The Gini Coefficient for Aggregate Family Earnings, AEFAM the Adjusted Gini Coefficients for Constant Hourly Earnings of Wives, WS; and for Constant Hours WOrked Per Year by Wives, Hw; From 1962 to 1971 t; The Gini Coefficient for Aggregate Familyt Earnings, AEFAM tthe Adjusted Gini Coefficients Holding iw h/iwt f, iHh/in' jW’vtI/jw h' t t 2 t 1971 and ij/th From 196 0 THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER PERSON BY OCCUPATION AND SEX Constant, THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER PERSON BY OCCUPATION AND SEX, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER PERSON BY OCCUPATION AND SEX, FROM 1962 TO 1971 THE NUMBER OF WORKERS EMPLOYED BY OCCUPATION AND SEX, FROM 1962 TO 1971, IN THOUSANDS THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY SEX AND OCCUPATION, FROM 1962 TO 1971, IN THOUSANDS THE HOURLY EARNINGS RATE BY OCCUPATION AND SEX, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER WEEK PER FEMALE RELATIVE TO THAT PER MALE BY OCCUPATION, FROM 1962 TO 1971 THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY OCCUPATION, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY OCCUPATION, FROM 1962 TO 1971 THE NUMBER OF FEMALE RELATIVE TO DULE WORKERS EMPLOYED BY OCCU- PATION, FROM 1962 TO 1971 THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY ALL FEMALES RELA- TIVE TO THAT OF ALL MALES BY OCCUPATION, FROM 1962 TO 1971 viii TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE THE HOURLY EARNINGS RATE PER FEMALE RELATIVE TO THAT PER MALE BY OCCUPATION, FROM 1962 TO 1971 THE MEDIAN ANNUAL WAGE OR SALARY INCOME PER FEMALE RELATIVE TO THAT PER MALE BY OCCUPATION, WOMEN'S BUREAU UPDATE, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS AT WORK PER WEEK PER PERSON BY INDUSTRY AND SEX, FROM 1962 TO 1971 THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER PERSON BY INDUSTRY AND SEX, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER PERSON BY INDUSTRY AND SEX, FROM 1962 TO 1971 THE NUMBER OF WORKERS EMPLOYED BY INDUSTRY AND SEX, FROM 1962 TO 1971, IN THOUSANDS THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY SEX AND INDUSTRY, FROM 1962 TO 1971, IN THOUSANDS THE HOURLY WAGE RATE BY INDUSTRY AND SEX, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER WEEK PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 THE NUMBER OF FEMALE RELATIVE TO MALE WORKERS EMPLOYED BY INDUSTRY, FROM 1962 TO 1971 THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY ALL FEMALES RELA: TIVE TO THAT OF ALL MALES BY INDUSTRY, FROM 1962 TO 1971 THE HOURLY WAGE RATE PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 THE MEDIAN ANNUAL WAGE OR SALARY INCOME PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, WOMEN'S BUREAU UPDATE, FROM 1962 TO 1971 ix LIST OF FIGURES FIGURE 1 A Hypothetical Lorenz Curve for Aggregate Family Earnings FIGURE 2 The Lorenz Curves or Aggregate Family Earnings in Selected Years CHAPTER 1 THE DISTRIBUTION OF FAMILY EARNINGS: AN OVERVIEW l..0 Introduction The purpose of this study is to examine some of the factors that ‘affect the distribution of family earnings; that is, whether certain factors Hake the distribution of family earnings more or less disperse. Particu- lar attention is given to working wives and their contributions to aggre- gate family earnings and its distribution. This special attention is warranted and of interest for two reasons. First, the increased labor force participation of married women has many major economic and social ramifications, one of which is its impact upon the distribution of aggre- gate family earnings. Second, the work that has already been done in this area is inconclusive. Many studies pertaining to income size dis- tribution and to the labor force participation of married women have made valuable suggestions as to which factors should be taken into consider- ation. After examining a few of these suggestions, an attempt will be made to integrate them into a model. 2.0 Some Suggestions From the Literature From the macro perspective of income size distribution studies and the micro perspective of labor force participation studies, the consensus is that the increased labor force participation of married women is having and will continue to have an impact on the distribution of family earnings. The direction and magnitude of this impact, however, depends upon the muIEancing or retarding influences of related factors traditionally con- sidered by each perspective. The following selections from the literature foous upon these related factors. To Herman Miller, the most important factor relating to the increased laibor force participation of married women is the proportion of families vwith working wives in the total population of all families. The total lpopulation of all families is divided into four groups: (1) Male head, Inarried, husband present, and wife not in the paid labor force; (2) Male head, married, husband present, and wife in the paid labor force; (3) Male head, other; and (4) Female head. Miller looks at the respective Gini coefficients of the first two groups and infers that: "...the incomes are much more equally distributed among families where the wife works than where she is not working; the sizeable increase in thegroportion of families with work- ing wives has tended to decrease income inequality during the past decade." [13, Miller, p. 22] Despite Miller's reference to the 1950's, he would probably make the same inference with respect to the 1960's since the proportion of families with a working wife has continued to increase. Miller is implicitly assum- ing that the shapes of the individual income distributions for these two groups of families are not changing as a result of the increased labor force participation of married women. In a more recent study, Charles Metcalf, initially agreeing with Miller, shows that in fact the underlying distributions do change and that the impact of working wives cannot be readily surmized. "The increase in the proportion of families with a wife in the labor force has an impact on the aggregate distribution for two reasons. First, they are shaped differently, a change in their relative proportion will appear as a change in the aggregate distribution even if there is no change in the shapes of the two individual distributions. Second, the two groups appear to show different responses to cyclical move- ments in the economy." [4, Metcalf, p. 66] The: cyclical movements, moreover, of the two underlying distributions wezne found by Metcalf to vary inversely. He found a positive correlation Ixrtween his measure of relative income equality and cyclical movements :fi): the distribution of families with male head, married, husband present, aund wife in the paid labor force. Counter-cyclical behavior was recorded ‘fior those families with Male head, married, husband present, and wife not in the paid labor force. The two studies point out the necessity of in- ‘vestigating the proportion of wives that work. From a different perspective, the cyclical labor force behavior of husbands and/or their wives has been documented in several labor force participation studies. A few of the major ones are those done by Bowen and Finegan, Cain, and Mincer. Labor force entry, exit, and number of hours worked are explained using the traditional notions of income and substitution effects. The question as to why a wife works, however, is not as relevant to this study as how much she works and for what wage. In the unlikely situation that the "whys" for working between husband and wife are independent, George Stigler hypothesizes that "...the effect of their work [wives] would be to increase, and very substantially, the dispersion of family earnings." [1, Stigler in Budd, p. 104] Edward Budd is quick to point out that this is only true if a special case is made for this unlikely situation: "It does not follow, for example, that the distribution of family income in a world in which some wives as well as hus- bands work is necessarily more unequal than the family income distribution in a world in which only husbands work and wives stay at home, even if in the first world a wife's decision to work is independent of whether her husband does so. Only if there is a very close and direct relationship between the amount earned by a working wife and the corresponding size of her husband's earnings would the degree of income equality of family income be greater in the first case than in the second." [1, Budd, p. xxvii] As. an example, in a world where substitution and income effects do not erlter into the decision of a wife to work, the increased labor force par- tuicipation of married women would have a greater disequalizing effect if time relative earnings of wives were 90 percent of their husbands', than say 40 percent . However, Budd's special case of Stigler's unlikely situation may be a crucial element of Jacob Mincer's more general situation. Lodged within Mincer's permanent and transitory income explanation of the labor force participation of married women, he notes: "For particular population groups observed, the more prevalent transitory components in the head's income, and the weaker the association between the wage rate of family members, the greater the equalizing effect of labor supply on family income distri- bution--and conversely." [5, Mincer, p. 97] (Emphasis added) Or in other words, where transitory components in the head's income are less prevalent, a weaker association between the husband's wage and that of his wife would have less of a disequalizing impact upon the distribu- tion of family income than a strong association. If transitory components are prevalent in the head's income the opposite would be true. The extent of transitory components in most head's income, and thus family income, dampens the disequalizing of family income resulting from the increased labor force participation of wives. Mincer's quote could also be inter- preted as emphasizing the buffering influence of the relative wage between husband and wife upon the prevalence of transitory or permanent income components of the head's income. For the purposes of a family income distribution, the former is more adequate. It does mean that if there is j_n fact a high correlation between the husband's and wife's wage, an nuzxrease in the number of working wives would make the distribution of family income more unequal, but deceptively so in degree. The literature suggests that the increased labor force participation Of 'wives could make the distribution of family income more or less equal depending upon the proportion of families whose wives work and the rela- tzive wage rate between husbands and wives. Taking the former related fac- ‘tor first, the increased labor force participation of wives could have \rarying impacts if a larger proportion of high income wives as compared to low income wives worked. Secondly, a wife is also part of the female labor force. Her occupational location and hourly wage rate is determined by those forces experienced by all females. The same is true for her husband. It stands to reason, therefore, that the relative wage rate be- tween husbands and wives is related to the occupational distribution of all males and females and their relative wage rates. If females generally receive lower wages than males in most occupations, in addition to the likelihood of being in relatively lower paying occupations; then the rela- tive wage between husband and wife is smaller, weakening their wage rate association. Using Mincer's argument, the impact of more working wives would be to decrease the inequality of family income. 3.0 The Model While the previous studies dealt generally with all families, this study will concentrate upon all husband and wife families in the U.S. The scope is further narrowed since earnings, not total money income, will be discussed. This is done for two reasons. First, most families are husband and wife families, and earnings are their major source of ihcc>rma. Second, establishing all husband and wife families and their earrlings as a core population avoids the heroic assumptions that would havee to be made in order to bridge the gap between a family earning dis- trijoution and a family income distribution. This core population of all husband and wife families is divided ixrto four groups: 1. Families in which the husband works and his wife stays at home; 2. Families in which both husband and wife work; 3. Families in which the husband stays at home and his wife works; and 4. Families in which neither the husband nor his wife works. The data for 1971 indicate,contrary to popular belief, that the first of these four groups is not the predominant one. This is determined by re- grouping the ten possible family earner patterns in Table l in the following manner. The largest single family earner pattern component of the first group is that where the husband is the sole provider (2.a.). 15,449 thousand families or 34 percent of all husband and wife families exhibited this pattern. When those families in which the husband worked along with some other relative or relatives other than his wife (3.b. + 4.b.) are added, the total number of all husband and wife families in group 1 is 20,094 thousand or 44 percent of the population. Combining the family earner patterns in which both husband and wife worked (3.a. + 4.a.) for group 2 gives 20,552 thousand or 45 percent of all husband and wife families. Group 2 then is slightly larger than group 1, making it the predominant family earner group. The remaining family earner patterns in Table l are partitioned into groups 3 and 4. The former (2.b. + 3.c. + 4.c.) accounts for only 3 percent of all husband and wife families, families where just TABLE 1 Family Earner Patterns for All Husband and Wife Families in 1971* FAMILY EARNER PATTERN 1. No Earners 2. One Earner a. Head Only b. Wife Only c. Other Relative Only 3. Two Earners a. Head and Wife b. Head and Other Relative c. Head Not an Earner 4. Three Earners a. Head and Wife b. Head an Earner, Wife Not an Earner c. Head Not an Earner 5. Total Number of Families *[12, 0.8. Department of Commerce, p. 80] 3,443 16,784 18,714 6,812 45,753 15,449 997 338 15,381 3,103 230 5,171 1,542 99 the wife worked. In 8 percent of all husband and wife families, however, neither the husband nor his wife worked (1. + 2.c.). The four groupings are easily expressed in algebraic terms. t t t = + EFAM Eh BW (1.1) t . . . t where EFAM represents the family's total annual earnings in year t; Eh . . t . represents the husband's earnings in year t; and Ew represents the wife's earnings in year t. In Equation (1.1), Et > 0 and E: = O for those families h in which the husband works and his wife stays at home. E: > O and Et > 0 w for those families in which both work. E: = 0 and E: > O for those families in which the husband stays at home and the wife works. Finally, E: = 0 t and Ew = 0 for those families in which neither works. From these groupings aggregate family earnings and its distribution for any given year can be constructed provided the following pieces of information are available for Equation 1.1: (l) the number of marital labor force participation pairings -- that is, all the possible combina- tions of husband and wife occupational pairings if they are employed as well as unemployed or not in the labor force employment statuses; (2) hourly earnings and hours worked by sex and occupation; and (3) the marital labor force participation rates -- that is, the number of families who find themselves in a particular marital labor force participation pairing as in (1). Assuming there are n possible occupations for either the husband and/ or his wife to be employed, plus two additional categories for unemployed and not in the labor force, then there are (n+2)2 possible marital labor force participation pairings. For any one marital pairing, the annual earnings of the husband and/or his wife are approximated by the annual earnings of a male or female in their respective occupations. Summing t t . . . . . Eh and Ew in Equation (1.1), then gives the family's total annual earnings, given a particular marital pairing. With (n+2)2 possible marital pairings, there are (n+2)2 possible discrete family earnings levels. Multiplying each family's annual earnings by the marital labor force participation rate for that marital pairing gives (n+2)2 subtotals of aggregate family earnings. Summing these subtotals determines aggregate family earnings. Reranking the subtotals by family earnings levels from lowest to highest determines the distribution of aggregate family earnings. Algebraically, m AEFAMt = 2: ?7Nt(.Et 7'71 1 t + h jEw) (1.2) 13 t . . where AEFAM aggregate family earnings, (n+2)2, the possible number of marital labor force partici- m = pation pairings, ‘I3 = a particular marital labor force participation pairing, i = the husband's occupation, j = the wife's occupation N = the marital labor force participation rate, and t = year. The selected studies of Section 2.0 of this chapter on family income size distribution tended to emphasize the marital labor force participation rates, EgNt; while those on labor force participation emphasized the rela- tionship of the husband's earnings, 1E5, to that of his wife, jE:. Equation (1.2) can be slightly modified in order to deal with the questions of the relative earnings between husband and wife as suggested in the literature, the relative earnings between all males and females in each occupation, the occupational distribution of all males and females, and how these related factors affect the distribution of aggregate family earnings. The annual earnings of either the husband or his wife are the 10 products of his/her hourly earnings in his/her occupation and the number of hours worked annually. Substituting hourly earnings and hours worked first in Equation (1.1) and then into Equation (1.2) gives the following results: Ht t m AEFAMt= z -.—.-Nt.(W + ..tw-n), (1.3) 37-13 1w 1 Hh j w J w U: where W represents hourly earnings and H represents the average number of hours worked annually. The annual earnings of husband and wife in a par- ticular marital labor force participation pairing in relative terms is found by factoring out the husband's annual earnings. AEFAM =_Z_3_-i-j-Ntii{Wh°Hh [1+( t)( t)1}. (1.4) 1 U- y 23" p D" The last two terms of Equation 1.4 give the relative earnings between a wife and her husband in a particular marital pairing. Multiplying the terms inside th br k t b ( Wt Wt)( Ht Ht) dd th ' f1 f e ac e s y i f/i f i f/i f a s e in uence o the relative wage between males and females in each occupation to the model.1 Equation (1.4) then becomes: t H: t iHh Wt jHW Ht AEFAM = 2,—7N{(i—- it:-)(----)(it.tw-H)[1+(«j——)( t)].} (1.5) TT'lJ t f1 f 13 iwf in iwh iHh Equation (1.5) contains six factors which affect aggregate family earnings . . . . t t . . and its distribution: (iWh/iwf), the relative hoursly earnings between males and females in the husband's occupation; (i H h/i H the relative f)! number of hours worked annually between males and females in the husband's . t t . , . . . occupation; (iwf-in), a floor on any one occupation 5 earnings Since it 1Instead of putting the relative hourly earnings and hours worked in terms of the husband's occupation, the wife's annual earnings could have been factored out. This would have put the related factors in terms of the wife's occupation. The results are the same. 11 represents what a female could earn in the husband's occupation; (jwt/iw:)' the relative hourly earnings between wives and husbands in a t . Ht/iHh)' the relative number of hours worked particular marital pairing; (j w annually by wives and husbands in a particular marital pairing; and ith' the marital labor force participation rates. The first three of these factors are determined by the overall labor force, while the last three are specific to all husband and wife families. A change in any one of these factors will affect aggregate family earnings and its distribution. Whether changes will have an equalizing or disequalizing impact, however, cannot a priori be determined. Gini coefficients are used to measure the relative equality or in- equality of aggregate family earnings. The impact of various factors in Equations (1.2), (1.3) and (1.5) is determined by holding each factor con- stant while all else varies, resulting in an adjusted Gini coefficient. Given a knowledge of the general direction of change in each of these factors, the impact of any one factor is deduced by comparing the adjusted Gini coefficient with the actual Gini coefficient. If the former is greater than the latter, the related factor held constant had an equalizing impact on the distribution of aggregate family earnings. Using one of the related factors in Equation 1.5 as an example, if the relative hourly earnings between all males and females is found to be decreasing and that the adjusted Gini coefficient with this factor held constant is greater than the actual Gini coefficient, then it can be surmized that the decrease had an equalizing impact on the distribution of family earnings -- and conversely. 12 4.0 The Outline of This Study Before aggregate family earnings and its distribution can be constructed, hourly earnings and annual hours worked for all males and females in the labor force by occupation are developed from Census data. This is done in a format very similar to Equation (1.1). Within this framework three basic questions relevant to Equation (1.5) can be answered: (1) What has been the overall direction of change in the relative hourly earnings between all males and females in the labor force; (2) What has been the overall direction of change in the relative number of hours worked between all males and females; and (3) What has been the overall direction of occupa- tional shifts for all males and females. Chapter 3 is a summary of these findings. Chapter 4 deals with three questions relating specifically to the population of all husband and wife families. Again following the format of Equation(1.l)the following questions relevant to Equation (1.5) can be answered: (1) What has been the overall direction of change in the rela- tive hourly earnings between wives and husbands and how closely are the two associated; (2) What has been the overall direction of change in the relative number of hours worked between wives and husbands; and (3) What has been the overall direction of occupational shifts for wives as well as husbands. The findings with respect to these three questions imme- diately follow the development of the model. Chapter 5 brings together the information and findings of Chapters 3 and 4 to construct aggregate family earnings and its distribution. An examination of the various impacts of the six related factors found in Equations (1.5) is preceded, however, by an examination of the Gini coef- ficients obtained using Equations (1.2) and (1.3). This is done for two 13 reasons. First, from Equation (1.2) the underlying distributions of all wives' earnings and all husbands' earnings can be compared. Second, using quintile analysis the contributions of wives as compared to that of their husbands in terms of hours worked and earnings received can also be examined. These extensions provide a more in depth understanding of the Gini coef— ficients that follow. Finally, summaries of all the major findings are presented in Chapter 6. The conclusions that will be drawn from these findings will, no doubt, suggest some policy implications and additional avenues for future research. CHAPTER 2 RELATIVE HOURLY EARNINGS AND HOURS WORKED BETWEEN ALL MALES AND FEMALES IN THE LABOR FORCE 1.0 Introduction This Chapter provides an empirical foundation to examine three related questions. First, what are the recent trends in: (a) the ratio of aggre- gate female earnings to that of male earnings; (b) the relative hourly earnings between all females and males; and (c) the relative quantities of labor supplied by both sexes? Secondly, what proportion of the gap between aggregate female earnings and male earnings is attributable to the other trends -- changing relative hourly earnings between females and males and/or the relative quantities of labor supplied? Finally, in the event that changing relative hourly earnings and/or relative quantities of labor are contributing substantially to the earnings gap between fe- males and males, what proportion of these changes are reflections of occu- pational shifts in the labor force? 2.0 Aggregate Earnings Aggregate earnings in the economy (AB) is identically equal to the aggregate annual earnings of all males (EM) and the aggregate annual earnings of all females (BF). Furthermore, the aggregate annual earnings of either males or females is equal tothe product of hourly earnings (W) and the average number of hours worked annually (H); algebraically, t t t t t AB 3 W °H + w °H (2.1) m m f f 14 15 where males are represented by the subscript m; females by the subscript f; and the time period by the superscript t. Dividing both sides of Equation (2.1) by the aggregate earnings of all males gives: t t - t t t t = + . . o 0 AE /EM 1 [(wf Hf)/(Wm Hm)] (2 2) Rearranging Equation (2 .2) and solving for Wig/W3: tt_ tt_ tt Wf/Wm - [(AE /EM 1)/(Hm/Hf)]. (2.3) Finally, substituting AEt E EMt + EFt into Equation (2.3): tt_ tttt Wf/W - [(EF /EM )/(Hm/Hf)]' (2.4) Equation(2$9 thus contains all three of the desired trend ratios: (EFt/EMt), the ratio of aggregate female earnings to those of all males; (Hi/HE), the relative number of average hours worked per year or the rela- tive quantities of labor supplied by both sexes; and (WE/Wi), relative hourly earnings between the sexes. Annual estimates for the median EFt and EMt are readily available. Estimates for either Hi/H: or WE/WE, however, are not easily accessible and must be constructed from disaggregate data. This is done by disaggregating the male and female labor forces along either occupational or industrial lines. One delineation serves only as a check upon the other. Occupational disaggregation involves labeling workers according to their skill level or occupation. Eleven such categories are used to encom- pass the 1abor force: (1) Professional, technical, and kindred workers; (2) Managers, officials, and proprietors, except farm workers; (3) Clerical and kindred workers; (4) Sales workers; (5) Craftsmen, foremen, and kin- dred workers; (6) Operatives and kindred workers; (7) Private household workers; (8) Service workers, except private household workers; (9) Laborers, 16 except farm.and mine; (10) Farmers and farm managers; and (11) Farm laborers and foremen. Industrial disaggregation divides all workers into various industries regardless of their occupation. All of the two-digit Standard Industrial Classifications (S.I.C.) can conveniently serve this purpose. The classifications are as fellows: (1) Agriculture; (2) Mining; (3) Fores- tries and fisheries; (4) Construction; (5) Manufacturing; (6) Transporta- tion, communication, and (ther public utilities; (7) Wholesale and retail trade; (8) Services and finance; and (9) Public administration. Disaggregated hourly earnings by sex for these occupations and indus- tries do not exist. Information on the average number of hours worked per year by sex, however, can be derived from the data that are available on the average number of hours worked per week and the average number of weeks worked per year by sex fbr both occupations and industries. The total number of hours worked per year by either sex in a particular disaggregated category is equal to the product of the average number of hours worked per week and the average number of weeks worked per year by an individual times the number of males or females employed in that category. Aggregating by sex over all occupations or industries gives the total number of hours supplied annually by all males, Hg; or the total number of hours supplied The ratio of H; to Ht t annually by all females, H can be expressed as f' f follows: n t z (.prt - WPY )' Qt H , m i m .3 = 1=1 Ht n t t t ’ (2.5) f .X (iHow ’ WPYf)'iQf i=1 where H = the total number of hours supplied, HPW = the average number of hours worked per worker per week, WPY the average number of weeks worked per worker per year, 17 Q = the total number of workers employed, m = males, f = females, t = year, . _ .th . 1 - the l d1saggregate category, n = 11, for occupational disaggregates, and n = 9, for industrial disaggregates. By substituting Equation (2.5) back into Equation (2.4), aggregate relative hourly earnings between all females and malesiJlthe labor force, Wf/Wi, is determined. With the appropriate data over some time period, all three trends in the first question can be examined. The second question, however, necessitates minor modifications of the model represented by Equation (2.4). Taking the first difference of the natural log and rearranging: t t t t t t ALn(EF /EM ) - Ammf/wm) - ALn(Hm/Hf). (2.6) Equation (2.6) gives the percentage change in each one of the trend ratios: t t t t t t . . . . . BF /EM , Hm/Hf, and Wf/Wm. By finding the var1ances of each term, it is possible to determine how much of the variance in ALn(EFt/EMt) or the aggregate earnings gap between females and males is accounted for by the variances of the two terms on the right-hand side of Equation (2.6): Var[ALn(EFt/EMt)] = Var[ALn(W§/W;)] + varLALn(H;/H:)] tt tt - A 2Cov[ Ln(Wf/Wm),ALn(Hm/Hf)], (2.7) then dividing each side of Equation (2.7) by the left-hand term, tt tt 1 = VarlALn(Wf/Wm)] + Var[ALn(Hm/Hf)] Var[ALn(EFt/EMt)] Var[ALn(EFt/EMt)] t t -2Cov[ALn(W /W ),ALn(Ht/H f m m "hfi' )1 (2.8) Var[ALn(EFt/EMt)] 18 Equation (2.8) tells how much of the variance of the percentage change in the ratio of aggregate female earnings to male earnings can be explained by the variance of the percentage change in the relative hourly earnings between females and males, by the variance of the percentage change in the relative quantities of labor supplied by both sexes, and by the covar- iance between the relative hourly earnings and quantities of labor supplied. In short, the development of Equation (2.8) should indicate which forces -- relative hourly earnings, relative quantities of labor supplied, or the interaction of the two -- are having the greatest impact. Finally, given that relative hourly earnings between females and males, or their respective quantities of labor supplied in the labor force, are substantially influencing aggregate earnings, indices are constructed to measure the direction and magnitude of these changes manifested in occu- pational shifts within the labor force. Occupational shifts are typically defined as movements from higher paying occupations to lower paying occu- pations. The indices constructed to measure these shifts are comparable to Paasche and Laspeyres indices. The average number of hours worked and hourly earnings obtained from Equation (2.4) are employed in constructing these indices rather than normal prices and quantities sold. The indices are supplemented by another group of Paasche and Laspeyres indices con- structed with annual earnings and employment figures. For instance, the Laspeyres index for male hourly earnings is con- structed in the following manner. First, hourly earnings for the current periods are multiplied by the base number of hours worked in each industry or occupation and then summed. This estimate is in turn divided by the sum of hourly earnings for the base period times the base number of hours worked in each industry or occupation; algebraically, 19 l-" II M5 2 Cl: LWINDEX; = , (2.9) M5 8 :1: i=11 3 i j where LWINDEX = the Laspeyres hourly earnings index, W = the hourly earnings per worker, H = the average number of hours worked per worker annually, t = the year, i = the 1th disaggregate category, n = 11, for occupational disaggregates, n = 9, fbr industrial disaggregates, j = 1, for males, 2, for females. 3' Similarly, an annual earnings Laspeyres index for males and females is developed using annual earnings and the actual number of workers employed: LEINDEXE , (2.10) where LEINDEX = the Laspeyres earnings index, E = the annual earnings per worker, Q = the number of workers employed, t = the year, i = the ith disaggregate category, n = 11, for occupational disaggregates, n = 9, for industrial disaggregates, j = 1, for males, j = 2, for females. 20 As a result, there are eight Laspeyres indices: a male hourly earnings index for industries, a male hourly earnings index for occupations, a male annual earnings index for industries, a male annual earnings index for occupations, and a comparable set of indices for all females. The Paasche indices for hourly earnings are constructed in a similar manner. First the current period hourly earnings are multiplied by the current number of hours worked in each industry or occupation and summed. This estimate is in turn divided by the sum of the base year hourly earnings times the number of hours currently worked in each occupation or industry; algebraically, " t t 2 iW3. - 1HJ PWINDEXE = 1:1 , (2.11) 1 t where PWINDEX the Paasche hourly earnings index, W = the hourly earnings per worker, H = the average number of hours worked per worker annually, t = the year, i = the 1th disaggregate category, n = 11, for occupational disaggregates, n = 9, for industrial disaggregates, j = l, for males, j = 2, for females. As before, an annual earnings Paasche index for males and females is developed using annual earnings and the actual number of workers employed: .EF - .QF PEINDEXj = , (2.12) H' I) M: IIMZS m )0 H. )-‘ 1.) LJ. H g.) l.) 21 where PEINDEX = the Paasche earnings index, E a the annual earnings per worker, Q - the number of workers employed, t a the year, i = the ith disaggregate category, n = 11, for occupational disaggregates, n = 9, for industrial disaggregates, j = 1, for males, j = 2, for females. There are eight Paasche indices as there are with the Laspeyres indices, making a total of 16 indices for comparison. The indices can be compared to see whether the Laspeyres indices are greater than the Paasche indices. If the female Paasche indices are greater than the female Laspeyres indices then females are moving into relatively higher paying occupations or in- dustries. If the female Paasche indices are smaller than the female Laspeyres indices, then females are moving into relatively lower paying occupations. The same analysis is true for the male indices. The Paasche and Laspeyres indices show the direction of occupational or industrial shifts, while the weighted averages that follow show their impact. The first step in ibis process is to calculate the relative hourly earnings between females and males solely from disaggregate data. Hourly earnings are multiplied by the total number of hours worked per year in each industry or occupation by sex, summed, and then divided by the number of hours supplied by all males or females in the labor force. A ratio of the two is derived as follows: 22 n 2: ,wt - at . 1 f 1 f 1=1 n t W: iilin .13.... n , (2.13) wm Z .Wt ° Ht . 1 m i m 1=1 n z 1"; i=1 where WE/W; = the relative hourly earnings between all females and males, W = the hourly earnings per worker, H = the average number of hours worked annually, m = male, f = female, t = the year, i = the 1th disaggregate category, n = 11, for occupational disaggregates, n 9, for industrial disaggregates. Once Equation (2.13) has been calculated using hourly earnings and hours worked for current periods, it is recalculated first using current hourly earnings and base year hours and then using base year hourly earn— ings and current hours. The difference in estimates of the relative hourly earnings between females and males using current period data and some com- bination of base year data shows the impact of occupational shifting. As an aside, the current year estimates of WE/W; obtained in the manner serve also as a check upon those found with Equation (2.4). The same process is used in finding the annual earnings differential as opposed to the hourly earnings differential between females and males. Here, as with the Paasche and Laspeyres indices, annual earnings and the actual number of workers employed are substituted in Equation (2.13). 23 3.0 The Data—Sources, Comparability, and Alterations 3.1 The CPS Although the data in this study were taken from a variety of published and unpublished sources, they are comparable. All of the data were directly or indirectly obtained from the Current Population Survey (CPS) of the Bureau of the Census and the Department of Labor. The CPS is conducted each month with approximately 50,000 households representing the entire population in the United States. The monthly statistics on employment, unemployment, and related subjects are analyzed and published in such pub- lications as Employment and Earnings and the Monthly Report on the Labor Force. Once each year in March, information on annual income is also collected and published in several additional sources. The Bureau of Labor Statistics (BLS) publishes some of these findings in their Special Labor Force Reports, while the Census Bureau publishes the Current Popula- tion Reports. The CPS is the only comprehensive survey of this nature. The income data obtained in household interviews of this type are subject to various types of reporting errors which tend to produce an underestimate of income. It is estimated that the income surveys conduc- ted by the Census Bureau during the past years have obtained about 87 percent of the comparable total money income aggregates and about 95 per- cent of the comparable money wage or salary income aggregates included in the personal income series published by the Office of Business Economics ([12], 0.8. Dept. of Commerce, No. 80, p. 10). One such response or re- porting error stems from the fact that entries are based on memory; in particular, upon the memory of the wife since she is usually at home during the time of the interview. Often minor or irregular sources of income are forgotten or the concept of income is misunderstood by the respondent. 24 Sampling variability in these statistics, however, can virtually be ignored when major national aggregates are being considered. The chances are about 68 out of 100 that an estimate from the sample would differ from a complete census figure by less than the standard error. The chances are 95 out of 100 that the difference would be less than twice the standard error ([12], U.S. Dept. of Commerce, No. 80, p. 12). Reliability depends upon both the size of the percentage as well as upon the size of the total upon which the percentage is based. Prior to 1967, the sample was spread over fewer areas with fewer inter- views. Historical data have not been revised to take account of the dif- ferences because the differences themselves are relatively small. For most analytical purposes, the data may be regarded as reasonably comparable ([10], U.S. Dept. of Commerce, No. 22, p. 18). 3.2 Sources The aggregate data necessary for Equation (2.4) are obtained in vari- ous annual issues of Income of Families and Persons in the United States [12]. Aggregate annual wage or salary income for all males and females is approximated by multiplying the median annual wage or salary income by the number of males and females who had this type of income. The defi— nition of wage or salary income used by the CPS includes wages, salaries, commissionships, or pay in kind from a private employer or from a govern- mental unit. Excluded, however, are wages in kind such as the value of food and fuel produced and consumed on farms, the net rental value of owner-occupied homes, the property income received by mutual life insur— ance companies, and the value of the services of banks and other financial intermediaries rendered to persons without the assessment of specific charges. 25 Aggregate annual earnings for all males and females is approximated by multiplying nonfarm and farm self-employment income by the number of males and females who had these types of income and then adding them to aggregate annual wage or salary income. The data for industries exclude the nonfarm and farm self—employment income; therefore, the data set for occupations is different from that collected for industries. Given the importance of wage or salary income as a component of earnings, however, the two data sets not only serve as a check upon each other, but also the industrial data should prove insightful with respect to the occupational data. In addition, this study uses the only measure available in employing medians rather than means for income data. The problem can be shown to be of minor importance in Table 2. If it can be shown that a relatively con- stant difference exists between the mean and median with respect to wage or salary income and earnings, then as long as the study confines itself to relative as opposed to absolute changes, medians are useful. Table 2 shows that this is indeed the case. Presented are both the median and mean wage or salary income for all industries and occupations as well as the comparable earnings data. Taking the ratio of mean to median and then wage or salary income to earnings income from 1967 to 1971, gives a con- stant relationship between the two. The final average of 1.0281 for males and 1.0139 for females reveals that the scalar difference is small. This fact enables the assumption to be made that the bias inherent in using medians rather than means is irrelevant for the purposes of this study. The disaggregate median annual wage or salary income by sex and industry and median annual earnings by sex and occupation were also obtained from Income of Families and Persons in the United States [ll], [12]. It is 26 TABLE 2 A Comparison of Median and Mean Incomes Wage or Salary Income--A11 Industries and Occupations [7] 1967 1968 1969 1970 1971 1967 1968 1969 1970 1971 Male Female Median Mean Median Mean $5,974 $6,116 $2,295 $2,678 6,376 6,523 2,468 2,869 6,854 7,105 2,612 3,089 7,108 7,469 2,801 3,341 7,351 7,774 3,045 3,541 Earnings-~A11 Industries and Occupations Male Female Median Mean Median Mean $6,020 $6,337 $2,351 $2,779 6,442 6,811 2,512 2,921 6,899 7,340 2,564 3,091 7,152 7,685 2,730 3,328 7,388 8,023 2,986 3,524 Ratio of Mean to Median Incomes--A11 Industries and ccupations 1967 1968 1969 1970 1971 Wage or Salary Income Earnings Male Female Male Female 1.0237 1.1668 1.0559 1.1820 1.0230 1.1624 1.0572 1.1628 1.0366 1.1826 1.0639 1.2055 1.0508 1.1928 1.0745 1.2190 1.0575 1.1629 1.0860 1.1802 Ratio of Mean/Median Wage or Salary Income to Mean/Median Earnings-~All Industries and Occupations Male Female 1967 1.0314 1.0130 1968 1.0334 1.0003 1969 1.0263 1.0193 1970 1.0225 1.0219 1971 1.0269 1.0148 AVG. 1.0281 1.0139 27 of interest at this point to note that the statistics that will be used for comparison in Chapter 3 from the U.S. Department of Labor/Workplace Standards Administration/Women's Bureau are based upon the same set of data. The data used in calculating the relative number of hours supplied by males and females, Hi/HE, were found in two separate sources. First, Employment and Earnings [16] provided the average number of hours worked per week per person by sex and occupation for the years 1967 through 1971. BLS provided the unpublished data for the years 1962 through 1966. BLS also provided the average number of hours worked per week per person by sex for all industries from 1962 to 1971 [12]. The estimates for the average num- ber of hours worked per week per person may differ somewhat from other sources since the estimates are based on the actual number of hours worked during the survey week. For persons working more than one job, the figure relates to the number of hours worked at all jobs during the E§§_survey week, and all the hours are credited to the longest job. The second source of information is The Werk Experience of the Popula- Eigg_[l9]. The average number of weeks worked per year per person by sex for industries or occupations is obtained from various Special Labor Force Repgrts. Published data cover the period of 1962 through 1970. BLS again furnished the unpublished data for 1971. The published form of the average number of weeks worked per year per person is disaggregated into two groups: full-time and part-time. Full—time workers are those who work 35 or more hours per week while those classified as part-time work less than 35 hours per week. Each one of these groups is further divided into three more groups: those who worked 50-52 weeks per year, those who worked 26-49 weeks per year, and those who worked 1-26 weeks per year. Thus this source not only provided the number of males and females employed in a particular 28 industry or occupation, but also their status with respect to the number of weeks worked per year per person. 3.3 Alterations Slight alterations in all four series -— wage or salary income data and earnings data, hours worked per week per person data, weeks worked per year per person data, and the number of workers employed data -- are neces- sary. In order to obtain a complete and consistent data set, the first compromise involved the average number of hours worked per week per person. The unpublished industrial data received from BLS combined both Agriculture and Mining in the early years, 1962 through 1966. The constraints imposed upon the other three industrial data series were complicated further by the median annual wage or salary income estimates found in the Current Popu- lation Reports. This data series combined Agriculture with Forestries and Fisheries. Given the significance of Agriculture in terms of the number of people employed, all three industries were combined leaving only seven industrial categories. The extent of the disaggregating problem is easily shown. Over the 10-year period of 1962 through 1971, Forestries and Fish- eries was incorporated in three different S.I.C.'s. On several occasions, Forestries and Fisheries is found in Service and Finance, with Agriculture, or by itself. As a result all four data series for industries -- median annual wage or salary income, hours worked per week per person, weeks worked per year per person, and the number of workers employed -- were adjusted by disaggregating and reaggregating using employment figures as weights to make Agriculture, Forestries and Fisheries, and Mining one classification. Occupational data was less troublesome. Private Household workers were sometimes included in the Service occupation. After excluding them 29 from Service to form their own category, the earnings, hours, and employ- ment occupational data sets were compatible. After the above alterations were made, the average number of weeks worked per year per person was tabulated by sex and industry or occupation from the disaggregate data. The average number of weeks worked per year per person is found by taking a weighted average as follows: .WPY? = (l-.YF)(51-.A1F+38-.A2F+13-.A3F)+.YF(51-.Bli+38-.82? 1 J 1 J 1 J l J 1 J l 3 1 J 1 J t +13-.B3.), (2.14) l 3 where WPY = the average number of weeks worked per year per person, y = the percentage of part-time workers, A1 = the percentage of full-time workers who worked 50-52 weeks per year, A2 = the percentage of full-time workers who worked 27-49 weeks per year, A3 = the percentage of full-time workers who worked 1-26 weeks per year, B1 = the percentage of part-time workers who worked 50-52 weeks per year, 82 = the percentage of part-time workers who worked 27-49 weeks per year, B3 = the percentage of part-time workers who worked 1-26 weeks per year, i = the ith disaggregated category, n = 11, for occupational disaggregates, n = 7, for industrial disaggregates, j = 1, for males, j = 2, for females, t = the year. The midpoint of the number of weeks worked per year, i.e., 51 weeks for those full- and part-time workers who worked 50-52 weeks per year is chosen 30 as the appropriate weight. Equation (2.14) is exact for all seven of the industrial disaggregates but is modified for occupational disaggregates. The work experience weekly breakdown for part-time workers did not exist for the entire 10-year period. Thus it was assumed that all part-time workers fall within the 27-49 weeks worked per year category. This is not an unlikely assumption, since few workers are found in the extremes; algebraically, .wpy? = (1-.y§)(51-.A1§+38-.A2?+13-.A3F) + ,yF-3s. (2.15) 1 j 1 J 1 J l J l J 1 J 4.0 Summary At the outset of this chapter, three interrelated questions were posed. This chapter not only proposed a method of analysis, but also the data to be used. The next chapter will present the findings and an analysis as to how they relate to each other. Of greater importance is the fact that these findings will in turn provide the foundation upon which to determine the possible impacts of working wives and related factors upon the distribution of family earnings for all husband and wife families. The relative hourly earnings, the relative number of hours supplied annu- ally by both sexes to the economy, as well as their trends, will play an important role in achieving this objective. CHAPTER 3 AGGREGATE TRENDS AND THE IMPORTANCE OF RELATIVE CHANGES IN THE LABOR FORCE 1.0 Introduction The preceding chapter posed three related questions: (1) What are the recent trends in the ratio of aggregate female earnings to male earnings, the relative hourly earnings between females and males, and the relative number of hours supplied by males and females; (2) What proportion of the gap between aggregate female and male earnings is attributable to the trends mentioned in (1); and finally, (3) What proportion of these trends are reflections of occupational shifts within the labor force. This chap- ter will present and discuss in detail the empirical findings. For pur- poses of comparison and discussion, these findings will be supplemented with information contained in the Handbook of WOmen Workers [20]. In addi- tion to the information contained in this Women's Bureau publication, their data were updated in order to make a direct comparison over the 1962 to 1971 period possible. 2.0 Aggregate Trends in Earnings, Hours, and Wages 2.1 Earnings and Wage or Salary Income The ratio of aggregate female earnings to that of all males in the labor force increased noticeably over the period of 1962 to 1971. The annual estimates for EFt/EMt found for Equation (2.4) using occupational data rose from .20 in 1962 to .26 in 1971. Similarly, the ratio of aggregate 31 32 female wage or salary income to that of all males also rose from .20 in 1962 to .27 in 1971 as shown in Table 3. The estimates indicate that TABLE 3 The Ratio of Aggregate Female Earnings to That of Males and the Ratio of Aggregate Wage or Salary Income of Females to That of Males, EFt/EMt, 1962 to 1971 Year Earnings Wage or Salary 1962 .20 .20 1963 .19 .21 1964 .20 .22 1965 .22 .24 1966 .20 .23 1967 .22 .25 1968 .23 .25 1969 .24 .25 1970 .25 .26 1971 .26 .27 aggregate earnings and wage or salary income of all females is growing at a proportionately faster rate than the aggregate earnings and wage or salary income of all males in the labor force. This suggests the following five possibilities: l) The relative quantity of labor supplied by males to that supplied by females is decreasing, ceteris paribus; 2) The relative hourly earnings or wage rate between females and males is increasing, ceteris paribus; 3) The relative quantity of labor supplied by males to that supplied by females is decreasing, while the relative hourly earnings or wage rate between females and males is increasing but at either a proportionately faster or slower rate; 4) The relative quantity of labor supplied by males to that supplied by females is decreasing, while the relative hourly earnings or wage rate between females and males is decreasing, but at a propor- tionately slower rate; and 33 5) The relative quantity of labor supplied by males to that supplied by females is increasing, while the relative hourly earnings or wage rate between females and males is increasing at a proportion- ately faster rate. Any other combination of increasing or decreasing relative factors would lead to a downward drift in EFt/EMt. An examination of the relative quan- tity of labor supplied by males to that supplied by females will eliminate some of these possibilities. 2.2 The Relative Quantity of Labor Supplied Aggregating the number of hours worked per week, the number of weeks worked per year, and the number of male or female workers employed across occupational and industrial lines shows that the relative quantity of annual hours supplied by all males to that supplied by females is decreasing. These findings immediately eliminate possibilities (2) and (5). Table 4 . . . . t t presents the occupational and industrial est1mates for Hm/Hf. TABLE 4 The Relative Number of Annual Hours Supplied by All Males to That Supplied by All Females From Occupational and Industrial Categories, Hfi/HE, 1962 to 1971 Year All Occupations All Industries 1962 2.47 2.46 1963 2.47 2.42 1964 2.44 2.48 1965 2.42 2.41 1966 2.35 2.35 1967 2.30 2.27 1968 2.28 2.26 1969 2.23 2.22 1970 2.20 2.21 1971 2.19 2.17 Males in general supply at least twice as many hours as do females to the economy each year, but the proportion is continually decreasing. This 34 implies a disproportionate increase in the relative number of hours supplied by females. Indeed, the literature on labor force participation rates for women would imply such a trend. The discrepencies between the columns for all occupations and all industries is a result of the two different data sets. The exclusion of those workers with farm and nonfarm self-employment income from the industrial data provides an additional comparison. In gen- . . . t t eral the 1ndustr1al estimates of Hm/H f are lower than those for occupations, suggesting that females are working proportionately more hours for wage or salary income than for self-employment income -- and conversely for males. The literature, however, would also imply that the decreasing trend in the relative number of hours supplied by all males to that supplied by all females is a result of the increased labor force participation of fe- males; and in particular, to married females. No doubt the increased rela- tive employment of females to males has played a substantial part in in- creasing the number of hours supplied by all females, but changes in the relative number of hours worked per week, the relative number of weeks worked per year, and thus the relative number of hours worked per year between males and females may be of equal significance. 2.2.a The_Quantity of Labor Supplied by Occupations Over the 10-year period of 1962 through 1971 for all occupations, as summarized in Table 5, the average percentage change in the number of hours worked per week per person was negative for both sexes. The overall occu- pational average decrease for males was only .18 percent. On the other hand, the average percentage decrease in the number of hours worked per week per person for females was .50 percent. Table A in Appendix A indi— cates that females in general worked fewer hours per week per person than males. Table G exemplifies the point in relative terms. As a result the average decrease in the number of hours worked per week per person for 35 TABLE 5 Average Annual Percentage Changes in Selected Variables by Occupation, 1962 to 1971 l o Variable 44 m. m -§ é.$ 0:. 03. 03. 2: 2“ H m o $404C) H m o n. g g o m o m o m In .4 c .g'o H .g'o w .g'o H 0'0 6 m -a m m o o w w m u n c .x m .x m .x m H >. o s H c z u 2 H 2 H m o B o m o o u o H o H .4 m u m m m 3 m m 3 w m 3 o 'g o. m m N Sex 6) m c) m c) m 5 gnu o >4m m m m m m m z m 0:» .4 m Occu- H ;.x H.¥ H H u w u u H 4.8 :33 233 323 4““ 5“ patlon «:23 43>. <32» am» «2:33 £3 Professional -.37 -.18 -.55 3.25 2.69 6.11 Male -.35 -.27 -.09 4.55 4.46 6.14 Female Mana ers -.44 -.04 -.48 .23 -.27 7.31 Male 9 -.77 .12 -.64 3.43 2.68 8.60 Female Clerical -.39 -.56 -.95 1.01 .04 5.55 Male -.48 -.25 -.72 4.12 3.36 4.72 Female S les .39 1.08 1.48 1.43 2.84 4.01 Male 3 -.84 -.O6 -.89 1.36 .47 4.29 Female Craftsmen -.13 .08 -.05 2.65 2.60 4.91 Male -.55 -.37 -.99 6.27 4.71 5.06 Female 0 ratives -.12 -.11 -.23 .55 .35 4.66 Male pa -.09 .20 .11 1.74 1.88 4.79 Female Private 1.26 -- -- 1.87 -- -— Male Households -.34 .03 -.31 -4.96 -5.18 3.45 Female Service -.71 -.81 -1.52 4.15 2.58 3.92 Male -1.18 .02 -1.16 4.62 3.41 6.40 Female Laborers .12 .22 .33 1.74 2.01 3.08 Male -l.04 .46 -.55 18.74 16.56 9.82 Female F ers .27 -.15 .12 -3.64 -3.51 6.54 Male .66 .51 1.14 5.06 6.51 6.13 Female Laborers .55 -.14 .43 -4.92 -4.53 2.29 Female *All Across -.18 —.03 -.22 1.39 1.16 5.17 Male Time -.50 -.01 -.52 2.82 2.27 5.15 Female *This figure was derived by holding the weighted average for all occupations. year constant and then taking a 36 females is greater in absolute terms, but may not be greater in relative terms. Nonetheless, the overall average decreases are due to the negative average percentage change in the number of hours worked per week per person in six out of the 11 occupations for males, and nine out of the 11 occupa- tional categories for females. Looking at specific occupations, the largest average decrease in the number of hours worked per week per person for males was in Service workers, except Private Household workers with a .71 percent decrease. In contrast, one of the largest average increases for males occurred in Sales workers with .39 percent. Although Private Household workers also had an average increase of 1.26 percent, a much smaller proportion of the male labor force is situated in this occupation. The Sales workers' occupation is worthy of further note since females registered one of their larger average per- centage decreases here. The .84 percent average decrease was sizeable, but Service workers, except Private Household workers and Managers, Offi- cials, and Proprietors, except Farm Wbrkers, also recorded average decreases of 1.18 and .77 percent respectively. The only average increases for fe- males took place in Farmers and Farm Managers with .66 percent and in Farm Laborers and Foremen with .55 percent. Both are occupations employing a very small segment of the female labor force. It is safe to say then that the average decreases for females were approximately equal to and in most cases greater in absolute terms than those for males. The average decreases were more widespread than for males resulting in total in a sharper average percentage decrease. Tables B and H in Appendix A provide the background data in analyzing the average percentage change in the number of weeks worked per year per [Kirson found in the second column of Table 5. The overall average percen- 37 tage change for males and females demonstrates the same behavior. While males showed a negligible average decrease of .03 percent in the number of weeks worked per year per person from 1962 to 1971, females showed a smaller average decrease of .01 percent. Males recorded an average de- crease in the number weeks worked per year per person in six of the 11 occupations. Females, in contrast, recorded an average increase in six of the 11 occupations. In Table 5 the greatest average decrease for males occurred again in Service workers, except Private Household workers with a .81 percent decrease. Clerical and Kindred workers also had a sizeable average decrease of .56 percent. The most significant average increase for males, however, was in Sales workers with 1.08 percent. In this same occupation, females had an average decrease of .06 percent. Other average decreases for females occurred in Clerical and Kindred workers with .25 percent, and in Crafts- men, Foremen, and Kindred workers with .37 percent. The largest average increases for females were in Laborers, except Farm and Mine with .46 per- cent and in Farmers and Farm Managers with .51 percent. The percentage of the female labor force in these last two occupations was a little over 3 percent in 1971. Given the overall average decreases in both the number of hours worked per week and the number of weeks worked per year per person for males, it is not surprising that the average percentage change in the number of hours worked per year per person was slightly negative. Table C in Appendix A has the raw data for the estimates found in the third column of Table 5. Similarly, the average percentage change in the number of hours worked Per year per person for females was negative resulting from average de- crteases in seven of the 11 occupations. As can be expected from the hours {xxr'week data, the average decrease for females is greater than that for males. 38 Finally, in column four of Table 5, the total number of males employed by all occupations over the decade increased significantly with an average increase of 1.39 percent. The average percentage increase, however, was enough to cause the average percentage change in the number of hours sup- plied by all males in the economy, Hi, to be positive -- 1.16 percent -- despite the average decrease in the number of hours worked per year per person. The increased number of females in the market allowed for an over- all average increase of 2.82 percent, which in turn offset the average de- crease in the number of hours worked per year, resulting in a substantial average increase in the number of hours supplied by all females in the economy, HE, of 2.27 percent. Although the increased labor force participation of females seems to be the overriding factor in determining the number of hours supplied by all females, a changing work pattern is also perceivable. A changing work pattern, hours worked annually, seems to dampen the hours of females more than males, although in Operatives and Kindred workers and in Farmers and Farm Managers, the changing work pattern accentuated the increased labor force participation of females. In Private Household workers, the decreasing working pattern in addition tothe average annual decrease in the number of females employed exaggerated the average annual decrease in the number of hours supplied by all females. In summary, the component parts of the number of hours supplied by all males or females reveal definite trends. Both sexes worked fewer hours per year per person with females working proportionately fewer. The average increase in the male labor force is not always sufficient to positively (Iffset this trend while the average increase, at least for this time period, for females is . 39 2.2.b The Relative Quantity of Labor Supplied by_Occupations The significance of these changes are further explored by looking at the average percentage change in the relative number of hours worked per week per person between females and males, the relative number of weeks worked per year per person between females and males, the relative number of hours worked per year per person between females and males, etc. The underlying tables for all of the variables found in Table 6 are Tables G through K in Appendix A. The overall average percentage change for all occupations with respect to the relative number of hours worked per week per person between females and males was negative. The average decrease of .14 percent over the 10- year period verifies the earlier hypothesis that the number of hours worked per week per person is decreasing faster for females than for males. In six of the 11 occupations, the average percentage change was negative. Positive average percentage changes were the greatest in the farm related occupations. The overall average percentage changes in the relative number of weeks worked per year per person, however, was positive; resulting from positive average increases in seven of the 11 occupations. The most notable average increase was .86 percent in Service workers, except Private Household. In contrast, Sales workers showed an average decrease of 1.11 percent. Again the findings are consistent with the previous section. The effect is a slight average percentage increase in the relative number of hours worked per year per person of .02 percent. This means that on average the number of hours supplied to the market annually by females is decreasing but at a relatively slower rate than that of males. In conjunction with the fact that the average percentage change in the relative number of females to males employed is positive, at an average 40 TABLE 6 Average Annual Percentage Changes in Selected Relative Variables By Occupation, 1962 to 1971 o c Relative §§ 'Eé 'gg H " Variable 4“: 58:: 533 4: 53 .. ZED: 230-: 2304 23% 2mg ‘0; o H w m o m-a 3‘”: 3:23 egg 2.... .3. >5 -H g m -a m m -H m 'H H m -H -H p o . u m .u o u g u o u u m o m.x m 3 H m m H m 'o m m 0 win .4 0 '4 M '*,H 8 '3.“ g, 'YIH m '3 >1 CC 484 3‘34 :2... .203 80.8 .43 cu- m H H o H H o H u m H a. o H-H o 5 ' .CQJr-i O patio“ 15.83 15.33 1:533.) 5.85 Econ. ESE: Professional .02 .44 .47 1.30 1.76 .14 Managers -.34 .19 -.14 3.18 3.04 1.21 Clerical -.07 .29 .23 3.39 3.60 -.89 Sales -1.17 -1.10 -2.24 .20 -2.15 .57 Craftsmen -.44 -.21 -.69 2.68 1.48 .49 Operatives .06 .37 .43 1.24 1.65 .05 Private Household 1'02 - -- 1°90 -- -- Service -.43 .86 .41 1.16 1.58 2.69 Laborers -.15 .43 .38 10.06 9.67 3.36 Farmers .54 .68 1.20 6.52 8.09 9.81 Farm Laborers .58 -.46 .15 -l.l7 -.79 -3.03 * All Across -.14 .19 .02 2.40 2.27 .71 Time *This figure was derived by holding the year constant for occupations and then taking a weighted average for all occupations. 41 annual increase of 2.40 percent, the relative number of hours supplied by all females and males had a 2.2 percent average increase and thus Hi/H: decreased from 1962 to 1971. Keeping in mind the changing work patterns, the relative number of hours supplied by all males and females is decreasing slower than it would if the female working patterns were keeping pace with those of males. The changing work patterns are plausibly a direct result of the fact that the increased labor force participation rates of females are due chiefly to the increased labor ferce participation of married fe- males. These females have more donfining responsibilities at home allowing for only part-time work, or full-time with little or no overtime. At the same time, the average percentage change in the relative number of weeks worked per year by females and males is positive. A tendency of more weeks worked per year on the part of females and fewer for males seems to be an adjustment for some as of yet unidentified change in life styles. Several of the occupations definitely reflect such changes. The overall positive average increases in relative variables in Professional, Technical, and Kindred workers show that more females are willing to put in longer hours each week and more weeks of the year. A similar situation exists in Operatives and Kindred workers, Farmers and Farm Managers, Sales workers, and Craftsmen, Foremen, and Kindred workers which show an adjust- ment process with a decreasing work pattern in terms of hours across the occupations. Surprisingly enough, Clerical and Kindred workers have made very little adjustment. The disaggregate data show that the average increase in the relative number of hours worked per year by all females and males is not just a Phenomena solely related to the increased labor force participation of women, but is also a result of males working fewer hours per week, fewer 42 weeks per year, while relatively more females are working relatively fewer hours more weeks of the year. If this is indeed a trend, the industrial data should augment these findings. 2.2.c The£Quantity of Labor Supplied by Industries Table 7 presents a summary of the industrial data for 1962 to 1971. The actual data are found in Tables N through S in Appendix A. Column 1 of Table 7 shows that the average percentage change in the number of hours worked per year per person for both sexes was negative. The overall indus- trial average decrease for males was only .02 percent. Although females also had a negative average percentage change in the number of hours worked per week per person, it was not as great as the occupational data. The average decrease for males in the number of hours worked per week per person was a result of average decreases in four of the seven industries. The largest average decreases occurred in Wholesale and Retail Trade and in Public Administration with .26 percent and .23 percent respectively. Manufacturing along with Transportation, Communication, and other Public Utilities both recorded positive average changes in the number of hours worked per week per person for males. In these two industries females had a negative average percentage change. In the two categories with positive average percentage changes for females, Agriculture, Forestries and Fisheries, and Mining had the largest with .49 percent. It can be seen from Table 7 that the average decrease incurred by females was again abso- lutely greater than that for males, confirming the occupational findings. The average percentage changes in the number of weeks worked per year per person, however, were inconsistent with the occupational data. Rather than a decrease in the average number of weeks worked per year, both males and females recorded a significant average annual increase of .22 and .63 43 TABLE 7 Average Annual Percentage Changes in Selected Variables by Industry, 1962 to 1971 l 'O m: m 94 H E.3 o H o H o u o H H m c m c m c 3 w z o H 94 O H 94 O H 0-) O Du 3 m m o m m m In .4 o 'O H 'O H 'U H O 'O (U 01 JJ 313 334 321 .9 “a a. 2 H 2 M 2 H d) O (9 O O .9: .9: .93 g3 .84 32 m a. 0n n. 0) n. E 619-) a) m a) sex m m m m m m z m 0 >4 3 m 0 __ H 9.54 H .34 H H g H H H °w 40$ :83 :03 was 433 23 Patlon #3313 fiSW 5‘th 150:» 63.004 904 g .49 3.37 3.90 -3.84 -.66 6.77 Female Construction -.05 .48 .44 2.91 3.33 5.44 Male -.20 4.47 4.49 6.26 11.42 .17 Female . .10 .19 .30 1.08 1.42 4.57 Male "anufaCturlng -.06 .14 .08 1.98 2.07 4.80 Female Public .02 -.13 -.12 2.12 1.97 5.94 Male Utilities -.58 .26 -.31 4.06 3.70 5.53 Female -.86 .20 -.66 3.25 2.58 4.48 Female Service .05 .46 .52 3.38 3.89 5.43 Male .25 .95 1.22 3.55 4.78 6.14 Female Public -.23 -.01 -.24 2.03 1.75 6.98 Male Administration -.21 -,15 -.33 2.71 2.38 5.66 Female *All Across -.02 .22 .21 2.18 1.96 5.27 Male Time -.11 .63 .53 3.59 3.06 5.32 Female *This figure was derived by holding the year constant for industries and then taking a weighted average for all industires. 44 percent respectively for those workers who received wage or salary income. The average percentage change was negative in only three of the seven in- dustries for males and one of the seven for females. Behavior is different for those with only wage or salary income as opposed to those with several sources of earnings again in that the average percentage change in the number of hours worked per year is positive for both sexes as found in column 3 of Table 7. The positive percentage changes in the number of weeks worked dominated the negative percentage changes in hours worked per week. Average decreases in the number of hours worked per year occurred in three of the seven categories for males as well as for females in the same three industries. The greatest average decrease fOr both males and females was in Wholesale and Retail Trade with a .62 percent decrease for the former and a .66 percent decrease for the latter. The largest average increases for females was in Agriculture, Forestries and Fisheries, and Mining as well as in Construction. While Construction also had one of the largest average increases for males of .44 percent, Services and Finance had an equal average increase of .52. Agriculture: Forestries and Fisheries with its 1.39 percent average increase for males was the largest. Females had sizeable gains in this category and in Construction. All but one of the industrial categories had a positive average per- centage change in the number of workers employed for both sexes. Column 4 of Table 7 shows that the largest average increase for males was in Service and Finance with 3.30 percent. Substantial average increases also were recorded in Construction, Wholesale and Retail Trade, and in Public Admin- istration with 2.91, 2.70, and 2.02 percent respectively for males. Two different industries besides Construction -- Service and Finance and 45 Transportation, Communication, and other Public Utilities -- showed sizeable positive average increases for females of 6.26, 3.55, and 4.06 percent re- spectively. Agriculture, Forestries and Fisheries had the only average percentage decreases for both sexes. As a result of these trends, the average percentage change in the number of hours worked per year by all females and males was positive -- 1.96 percent fer males and 3.06 percent for females. Both estimates of the average increases are higher than the occupational data since a dampen- ing effect was not felt through a decreasing work pattern. Females had an average increase substantially above that for males with respect to the number of hours supplied by them. In short, the number of hours supplied by all females is increasing at a faster rate than that supplied by males in the economy, thus Hi/H: is decreasing. 2.2.6 The Relative Quantity of Labor Supplied by Industry Although the average percentage changes were different in absolute terms, the same pattern develops in relative terms for industries as in occupations. The estimates found in Table 8 are based on the raw data found in Tables T through V in Appendix A. As in the occupational data, the average percentage change in the relative number of hours worked per week per person between females and males was negative. This phenomenon was a result of a relative average percentage decrease for this variable in four out of the seven industries. Similarly, the average percentage change in the relative number of weeks worked per year per person was posi- tive. Relative average percentage decreases occurred in Manufacturing and in Public Administration. The average percentage change in the relative number of hours worked per year per person was also positive. This time Transportation, Communication, and Other Public Utilities in addition to 46 TABLE 8 Average Annual Percentage Changes in Selected Relative Variables By Industry, 1962 to 1971 comuwm Hem mama m... B w W mu W Q. U wmms m>wumHmm 059 .L .L . . a . .L a . . Ham.» Hem 60.32 3 2 4 O 5 4 3 5 Im5m $30: no Hon 6. cm 7. n” 9. on 6. 9” I552 m>wum~om was 6 l 1 use.» Mom cmmoamfim 4 9 3 6 8 5 6 6 23.8.. to .3 a s on a” s a" 7. 7. I552 w>flumHmmaonB a. 2 1 common Mom .5602 50m 3 2 8 0 l 2 6 7 09.503 95.52 mo Hun 9" a... I... I” J 7. nw A I852 m>fiumamm one 2 .3 . . . comuwm 502 5002 Mom 7. I. 2 8 7 0 O 2 6 5 O 4 5 5 l 5 Mumxuoz mxwmz mo H03 L in _o o o o .o o I852 0>wumamm 02B sownmm Men 3003 50m 5 S 5 8 S l 2 6 @9303 mH502 mo web a” 7" J a” 9" 9” O. 0. I552 o>aumamm one . . . _ . n e g 0 l n m .l e e 0 . t S V a r .1 M a S .1 .1 y u t S r O t r r t C t e t r a a t 1 u C .1 e S C l V s u r a c t c c.i A u c .t .r .1.1 e .i .1 n m .d i. s u .1.1 .d v .1.1 .1 e n r n .m.1 a r .m.m .1 m T. a. o t r e A . A C P U T S P A .a T 47 Manufacturing and Public Administration recorded the relative average per- centage decreases. The relative number of female and male workers employed was positive except in Agriculture, Forestries and Fisheries, and Mining. As a result the average percentage change in the number of hours supplied annually by all females and males was positive, thus Hi/Ht is also decreasing f as in occupational data. 2.3 HourlyAEarnings and Wage Rates Since the overall average percentage change in the relative number of hours supplied by all females and males is definitely positive, possibili- ties (l), (3) and (4) still exist. By looking at the trends in the relative annual hourly earnings and wage rates, for occupations and industries re- spectively, the possibilities can be narrowed even further. This is done by solving Equation (2.4) for WE/Wfi. Theoretically, the substitution of the ratio of aggregate annual female earnings or wage or salary income to that of all males and the ratio of the aggregate number of hours supplied annually by males to that of females into Equation (2.4) should give us a good approximation of the relative hourly earnings for occupations and the relative wage rate for industries. Unfortunately, the data were not that accurate. The appropriate approximation of the ratio of aggregate annual female earnings to that of all males was found in the following manner. First, by using the estimates of EFt/EMt found in Table 3 and those for Hi/H: found in Table 5, WE/W; was calculated. Table 9 contains the results. Hourly earnings seem to exhibit a more noticable upward trend than the wage rate, although both behave eratically. Comparing these estimates of hourly remunerations to those calculated in Tables L and Y in Appendix A . t . suggests that these estimates of WE/wm are too low. The reason 18 that t f observations were dropped that had insufficient . . t in the calculation of Hm/H 48 TABLE 9 The Ratio of Hourly Annual Earnings or Wage Rates Between Females and Males, WE/Wfi, Using Aggregate Persons' Data, 1962 to 1971 Year Hourly Earnings Wage Rates 1962 .50 .55 1963 .52 .55 1964 .54 .59 1965 .57 .62 1966 .54 .58 1967 .57 .60 1968 .57 .61 1969 .56 .59 1970 .57 .61 1971 .59 .62 data, thus the aggregate number of males and females with earnings was six percent larger than the total in the disaggregate categories. The estimates t t . . . of EF /EM were too small Since a disproportionate percentage of the dropped data was in the male labor force. This would bias the estimates of Equation . . t . (2.4) downward. A new estimation of EF /EMt was then calculated by multi- plying annual earnings or wage or salary income by occupation and sex, or by industry and sex times a weighted average of the number of workers in . . . t t that particular disaggregate. The new estimate for both EF /EM and t t . . t t . . Wf/W are found in Table 10. The estimates of Wf/W are now more in line m m with the underlying raw data and reveal little if any closing of the remun- erations gap. An examination of particular occupations and industries t . . . t shows the sources of the eratic behaVior in Wf/Wm. 2.3.a Hourly Earnings Rates by Occupation Over the 10-year period the average percentage change in the hourly earnings for males was positive with an overall occupational average in- crease of 5.17 percent. Females, despite their lower initial wage, had a 5.15 percent average annual increase. The largest average increase for males was in Managers, Officials, and Proprietors with a 7.31 percent 49 TABLE 10 The Ratio of Aggregate Female Earnings to That of Males and the Ratio of Aggregate Wage or Sala Income of Females to That of Males, EFt/EM , Using Weighted Averages, 1962 to 1971 Annual Annual Wage or Year Earnings Salary Income 1962 .26 .30 1963 .27 .30 1964 .25 .31 1965 .29 .32 1966 .29 .32 1967 .30 .33 1968 .30 .34 1969 .30 .34 1970 .31 .34 1971 .31 .35 The Ratio of Annual Hourly Earnings or Wage Rates Between Females and Males, WE/Wg, Using Weighted Averages, 1962 to 1971 Year Hourly Earnings Wage Rates 1962 .66 .75 1963 .66 .73 1964 .67 .76 1965 .70 .77 1966 .67 .76 1967 .68 .76 1968 .69 .77 1969 .66 .75 1970 .67 .75 1971 .68 .76 50 average increase. The next highest were recorded in Farmers and Farm Mana- gers with a 6.53 percent average increase and Farm Labor with a 6.66 percent average increase. The other average annual increases for males ranged from 3 to 6 percent. Females had their largest percentage increase in Nonfarm Labor with a 9.82 percent increase as shown in column 6 of Table 4. This average increase is 6 percent greater than that of their male counter- parts. A similar situation occurred in Service workers, except Private Household workers. The opposite phenomena was true in Farm Labor. In Clerical and Kindred workers where a substantial portion of the female labor ferce exists a smaller average increase of 4.72 percent was recorded as compared to that of males -- 5.55 percent. 2.3.b Relative Hourly Earnings By Occupation In relative terms, the overall average annual percentage change was slightly positive -- .71 percent. The weighted averages showed a small gain by females in hourly earnings relative to males. The average annual percentage change in relative hourly earnings was negative in only two of the 11 occupations. The most noteworthy average percentage decrease was in Clerical and Kindred workers with a .89 percent decrease. The other average percentage decrease was in Farm Labor with a sezeable 3.03 percent decrease. In contrast, the largest positive average percentage change in relative hourly earnings was in Farmers and Farm Managers with a 9.81 per- cent increase. Other marked average percentage increases were in Nonfarm Labor with a .36 percent increase; Service workers, except Private House- hold, with 2.69 increase; and Managers, Officials, and Proprietors with a 1.21 percent increase. Only possibilities (I) and (3) are left: the relative quantity of labor supplied by males to that supplied by females is decreasing, while the relative hourly earnings between females and males is increasing, or remaining relatively constant. 51 2.3.c Wage Rates binndustry Looking back at Table 7 shows that the overall average percentage change in the hourly wage rate was 5.27 for males and 5.32 for females. The aver- age increases are comparable to those found using occupational data. The industrial estimates are slightly above the occupational ones despite the fact that relative hourly earnings are less than the relative hourly wage rates found in Table 10. The largest average percentage increase in the hourly wage rate for males was in Public Administration with a 6.98 percent annual increase. Sizeable average increases for males also were in Trans- portation, Communication, and Other Public Utilities with 5.94 percent and in Wholesale and Retail Trade with 5.77 percent. Although females exper- ienced average percentage increases in each of these industries, the average increases were smaller with 5.66 percent, 5.53 percent, and 4.48 percent respectively. Females experienced greater average percentage increases than males in three of the seven industries. The increases were in Agri- culture, Forestries and Fisheries, and Mining with the greatest difference of 2 percent; Manufacturing with a .25 percent difference; and Service workers, except Private Household workers with a .70 percent difference. 2.3.d Relative Wage Rates by Industry The significance of the figures presented in Table 7 are seen by com— paring them with those for the relative wage rates in Table 8. The over- all average percentage change for all industries was negative -— a .17 per- cent annual decrease. This overall average decrease was a result of average decreases in four of the seven industries which contained at least 30 per- cent of the female labor force in 1971. Table 8 shows that Construction had the largest average decrease in the relative wage rate with a 4.53 per- cent annual decrease; Public Administration also had a sizeable decrease of 52 1.32 percent; Wholesale and Retail Trade registered a .83 percent average decrease; and Transportation, Communication, and Other Public Utilities had a .57 percent average decrease. Most of these decreases were offset in the aggregate by the .77 percent average increase that occurred in Service and Finance which employs 48 percent of the female labor force. The average increase in this occupation, however, was not enough to offset all of the relative losses. In summary, the industrial data suggest possibilities (l) or (4): the relative quantity of labor supplied by males to that supplied by females is decreasing, while the relative hourly wage between females and males is decreasing or remaining relatively constant. These suggestions are not incompatible with those from the occupational data. The common possibility of (1) between the occupational data and the industrial data leads to the suggestion that the relative gains made by females with respect to self— employment income must positively offset the losses incurred by females working for someone else. This stands to reason, since one is less likely to cheat, or discriminate against, one's self. At this point it would be helpful to see how the Women's Bureau inter- prets the earnings gap and whether or not their study confirms or contra- dicts these findings. 2.4 Women's Bureau Data and Their Updates The information contained in the Handbook of Women Workers, 1969, per- tains only to occupations but was obtained from the CPS as was the income data in this study. It was easy then to take the Women's Bureau's infor- mation and update it for comparison as well as to construct comparable figures for industries. The original Women's Bureau study covers the years 1956 to 1966. In reference to this period, they note a widening gap between 53 the median annual wage or salary income of females and males; to be specific, "a comparison of median wage or salary income of full-time year-round women and men workers reveals not only that the income of women are consi- derably less than those of men but also that the gap has widened in recent years [20, U.S. Dept. of Labor, p. 133]. In 1956, the median wage or salary income of full-time year-round women was 63 percent of men's and only 58 percent in 1966. Continuing the estimates to 1971 gives similar results. The gap between aggregate female and male earnings seems to have stabilized although it is still greater than it was in 1956. The estimates were obtained by taking a weighted average of the median wage or salary incame. The overlapping years are identical. Table 11 presents the results. TABLE 11 The Relative Aggregate Median Annual Wage or Salary Income of Full-Time Year-Round Females and Males, WSFTE/WSFTIE, From 1962 to 1971 t t Year WSFTf/WSFTm 1962 .58 1963 .58 1964 .58 1965 .58 1966 .58 1967 .59 1968 .58 1969 .58 1970 .60 1971 .60 Table 11 also indicates a sizeable gain in 1970 and 1971. Extended esti- mates of the relative annual wage or salary income between females and males for all workers and not just the small minority who work full-time year- round in Table 12 shows the same behavior, but with a wider gap. The sta- bility in the gap between female annual wage or salary and that of males 54 TABLE 12 The Relative Aggregate Annual Median Wage or Salary Income of All Werkers Between Females and Males (WSE/ng) Across A11 Occupations from 1962 to 1971 t t Year WSf/wsm 1962 .47 1963 .46 1964 .47 1965 .47 1966 .47 1967 .48 1968 .48 1969 .48 1970 .49 1971 .50 can be explained using the information of the previous section; that is, females are now working shorter weeks more weeks per year for a relatively lower wage. This is not necessarily inconsistent with the occupational data, since that data contained self-employment income. This strengthens the overall case for possibility (3). The women's Bureau made "A Comparison of wage or salary income of full- time year-round women workers in selected occupation groups with that of men [which showed] that women's relative income positions deteriorated in most occupations during the period of 1956 to 1966" [20, U.S. Dept. of Labor, p. 134].in the following five occupations: (1) Professional, Technical, and Kindred workers, (2) Managers, Officials, and Proprietors, except farm workers, (3) Sales workers, (4) Operatives and Kindred workers, and (5) Service workers, except Private Household workers. In only the first and the last occupations did the relative income position of females to that of males improve from1956 to 1966. The update of these 55 categories in Table M of Appendix A, however, indicates that the relative income position of females improved very little if at all in Professional, Technical, and Kindred workers; definitely deteriorated from 1962 to 1971 in Managers, Officials, and Proprietors, except Farm; deteriorated also in Sales workers; improved slightly in Operatives and Kindred workers; and improved substantially in Service workers, except Private Household workers. All of the results correspond to the changes that took place as reflected in Table 6 for all workers, except in Managers, Officials, and Proprietors, except Farm workers. The difference here is that the occupational date in Table 6 contained in addition to the wage or salary income of workers their self-employment income from farm and nonfarm sources. The gains made with respect to the latter by females positively offsets the losses in the rela- tive wage between females and males. Although there was a slight gain in the relative hourly earnings position of females in Sales workers, the gain was accompanied by a sizeable average percentage decrease in the relative number of hours supplied by women to that supplied by males. In addition to the WOmen's Bureau's five occupations the relative hourly earnings posi- tion of Clerical and Kindred workers also continued to worsen. An updating for industries reveals a definite upward trend for full- time year-round workers, but not for all workers as shown in Table 13. 3.0 The Importance of Relative Quantities of Labor Supplied and Relative Remuneration Rates Between Females and Males The evidence presented to now suggests that the most important variable in explaining the widening gap between aggregate annual female earnings and male earnings or wage or salary income is the relative quantity of labor supplied between them. Other possible causes of variation in this gap, however, were posed in the second question of Chapter 2. One can phrase 56 TABLE 13 The Relative Aggregate Median Annual Wage or Salary Income of Full-Time Year-Round Workers (WSFTE/WSFTfi) and All Workers (WSE/Wsfi) For All Females and Males, Industrial Data, 1962 to 1971 t t t t Year WSFTf/WSFTm wsf/wsm 1962 .57 .46 1963 .57 .45 1964 .57 .46 1965 .57 .47 1966 .57 .46 1967 .58 .47 1968 .58 .47 1969 .58 .47 1970 .59 .47 1971 .60 .49 the question as follows: What proportion of the percentage change in the ratio of aggregate annual earnings or wage or salary income of females to that of males can be attributed to the percentage change in the relative number of hours supplied annually by all males and females (Hi/HE) or to the percentage change in the relative hourly earnings or wage rates between females and males, (WE/Wi). Using Equation (2.8) of Chapter 2, the results in Table 14 were obtained. The calculations vary substantially between occupations and industries. In the industrial data the variance in the percentage change in WE/W: is 1.81 times the variance in the percentage change in EFt/EMt. The covariance of t t . . . the percentage change between Wf/Wh and Hi/H: is 1.71 times the‘varlance t t t . to H /H makes the covari- f f m . t t . . . . in EF /EM , and pOSitive. The inverSion of Hi/H ance term negative. This makes the relative wage rate and hours comparisdn . . . . t t . . . eaSier. POSitive percentage changes in Hf/Hm are assoc1ated Wlth negative . t t . percentage changes in Wf/Wm. In general, as the relative number of hours supplied by all females to that supplied by males increased, the relative wage rate between the two decreased. 57 TABLE 14 The Relative Importance of the Variance in the Percentage Change of Hfi/HE, WE/Wfi, and the Cov (H§/HE, WE/Wg) in Explaining the Variance of EFt/EMt, From 1962 to 1971 Solving Equation (2.8) using industrial disaggregates: Var [A Ln (art/mt) ] = . 00030462 100. 00 percent Var[ALn(H;/H:)] = .00027141 89.10 Percent Var [A Ln (wz/win = . 00055221 181 . 28 percent .00025983 - 170.59 Percent t t t t Cov[ALn (Hm/Hf) . A Ln (wt/Wm” 99.79 Percent Solving Equation (2.8) usipg occupational disaggregates: Var [ALn (art/mat” = .00058494 100.00 Percent varIALn(H;/H:)] = .00008458 14.46 Percent t t VarLALn(Wf/Wfi)] - .00073223 125.18 Percent CovIALn(H;/H:), ALn(W:/W;)] .00011595 - 39.65 Percent 99.99 Percent In the occupational data, the variance in the percentage change in WE/W; is 1.25 times the variance in EFt/EMt. The covariance term here is only a fourth as large as the variance of relative hourly earnings and positive. The variance in the percentage change in the relative number of hours supplied between males and females is only .14 percent as large as the variance in the percentage change in EFt/EMt. The positive covariance term is interpreted as before. In general as the relative number of hours supplied by females to that supplied by males increased; that is, Hg/H: decreased, then the relative hourly earnings between females and males decreased. Thus, when viewed from both the occupational disaggregation, and the industrial disaggregation, relative earnings have been less volatile than relative wages because of the offsetting behavior of relative hours worked. 58 4.0 Occupational Shifts in the Labor Force Occupational shifts imply a movement of workers among occupations. Workers may shift from relatively high paying occupations to relatively low paying occupations or vice versa. The indices discussed in Chapter 2 to capture this movement are presented in two separate sections. First, the Paasche and Laspeyres indices are presented to show the direction of the occupational shifts. Then the weighted averages are presented to show the impact of these shifts. 4.1 Shifts in Occupations The values found for the Laspeyres and Paasche indices of Equations (2.9) through (2.12) are presented in Table 15. Using the indices three separate comparisons can be made: (1) male versus female; (2) Laspeyres versus Paasche; and finally (3) Occupational versus Industrial indices. In most cases, the industrial female indices are noticeably larger than the male indices. This means that female hourly wages and annual earnings have increased at a faster rate than those of males. This does not necessarily mean, however, that female remunerations have increased relatively. A previous section of thischapter showed that with respect to wage or salary income females in general are incurring a slight relative loss. For occupational data, the female indices are not noticeably larger than the male indices and in some cases, especially after 1969, they are smaller. This seems to be the case with respect to both hourly earnings and annual earnings. The comparison of the Laspeyres indices with Paasche indices shows that for males there was little if any occupational shifting, while for females substantial shifting occurred for wage or salary income. In 1965, females moved to relatively lower paying industries, since the Paasche 59 TABLE 15 Laspeyres and Paasche Indices of Hourly Remunerations, Annual Remunerations by Sex for Occupations and Industries From 1962 to 1971 Industrial Indices Laspeyres Paasche Annual Wage or Annual Wage or Wage Rate Salary Income Wage Rate Salary Income Year Male Female Male Female Male Female Male Female 1962 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1963 1.05 1.01 1.04 1.02 1.05 1.01 1.04 1.02 1964 1.07 1.09 1.08 1.08 1.07 1.09 1.08 1.08 1965 1.11 1.46 1.14 1.15 1.11 1.38 1.14 1.15 1966 1.16 1.49 1.21 1.20 1.16 1.48 1.21 1.20 1967 1.21 1.49 1.27 1.28 1.21 1.54 1.27 1.27 1968 1.31 1.58 1.35 1.38 1.31 1.63 1.35 1.37 1969 1.44 1.70 1.47 1.46 1.44 1.77 1.46 1.46 1970 1.58 1.93 1.55 1.55 1.58 2.04 1.55 1.54 1971 1.62 1.94 1.60 1.68 1.62 2.06 1.60 1.68 Occupational Indices Laspeyres Paasche Annual Wage or Annual Wage or Wage Rate Salary Income Wage Rate Salary Income Year Male Female Male Female Male Female Male Female 1962 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1963 1.04 1.04 1.07 1.03 1.04 1.04 1.05 1.04 1964 1.07 1.10 1.08 1.08 1.07 1.10 1.08 1.08 1965 1.09 1.16 1.12 1.15 1.09 1.15 1.17 1.15 1966 1.16 1.16 1.20 1.15 1.16 1.16 1.19 1.15 1967 1.22 1.24 1.25 1.22 1.22 1.23 1.25 1.22 1968 1.30 1.34 1.32 1.30 1.30 1.33 1.32 1.29 1969 1.42 1.38 1.42 1.34 1.42 1.39 1.42 1.34 1970 1.51 1.50 1.49 1.43 1.51 1.51 1.49 1.44 1971 1.60 1.58 1.56 1.51 1.59 1.59 1.55 1.52 60' index for hourly wages is lower than the Laspeyres. After 1966, the female Paasche hourly wage index is substantially above the Laspeyres,indicating that females moved into relatively higher paying industries. Both male and female annual wage or salary indices show very little deviation from each other. In the occupational data, there were very little change and where changes did occur the female Paasche indices were only slightly greater than the Laspeyres indices. The occupational indices were in general less than the industrial indices. The male indices were very close. On the other hand, there was a substantial difference between female occupational indices and industrial indices. This may indicate the females as a whole are making greater gains with respect to wage or salary income than they are in self-employment income. 4.2 The Impact of Occupational Shifts The occupational shifting of females did affect the relative hourly and annual remunerations between females and males as shown in Table 16. The estimates were derived using Equation (2.13). The results are presented separately for occupations and industries. The first three columns of each section contain annual earnings or wage or salary income. The last three columns are hourly remunerations. The first column in each set contains the current values. The second column has the estimates of the respective relatives with employment held constant. The third column was obtained by holding annual or hourly remunerations constant and letting the quantity of labor vary. The occupational data for both annual earnings and hourly earnings show that the relative annual earnings and relative hourly earnings between females and males would have been consistently less if employment patterns Year 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 Year 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 61 TABLE 16 A Weighted Average of Relative Annual and Hourly Remunerations Between Females and Males for All Occupations and Industries, From 1962 to 1971 Annual Remunerations .43 .42 .43 .45 .43 .44 .44 .42 .44 .45 Employment Earnings Current Constant Constant .43 .42 .43 .44 .41 .42 .42 .40 .41 .41 .43 .43 .43 .44 .44 .45 .45 .45 .45 .45 Wage or Employment Salaries Current Constant Constant .46 .45 .46 .47 .46 .47 .47 .47 .47 .49 .46 .46 .47 .47 .46 .47 .47 .46 .47 .49 .46 .46 .46 .46 .47 .47 .47 .47 .47 .46 Hourly Remunerations Hours Hourly Earnings Current Constant Constant .66 .67 .68 .70 .67 .68 .69 .66 .68 .68 .66 .66 .67 .70 .65 .66 .67 .64 .65 .65 Hours .66 .66 .66 .67 .68 .68 .68 .68 .68 .69 Wage Rate Current Constant Constant .75 .73 .76 .77 .76 .76 .77 .75 .75 .76 .75 .72 .76 .77 .76 .76 .77 .75 .76 .76 .75 .75 .75 .75 .74 .75 .75 .75 .74 .74 62 and the number of hours worked had remained as they were in 1962. Allow— ing employment and the number of hours worked to vary, however, while holding annual earnings and hourly earnings at their 1962 levels would have made the relative annual earnings generally larger and the relative hourly earnings about the same. This implies that the occupational shifting into higher paying occupations by females has increased their relative annual earnings. This increase, however, is not as great as it could have been if the in- creased supply of workers had not lowered the annual earnings in these occupations. The impact of the structural shifts in the industrial data was slight. The relative annual wage or salary income was not affected in general by shifts in employment from lower paying to higher paying occupations. This tends to augment the findings in Section 3.0 of this chapter that the co- variance term between hours worked and wages was an important factor in explaining the variance in the aggregate annual wage or salary gap between females and males. The positive covariance term indicated that substantial increases in the supply of females would be associated with a substantial decrease in their relative wage. 5.0 Summary and Conclusions The relative number of hours supplied by males to that of females was found to be decreasing; partly as a result of changing work patterns, but mostly as a result of the increased labor force participation of fe- males. The overall direction of change in the relative hourly earnings between females and males is positive, but the evidence is not strong. The reason for the doubt is the fact that the relative wage rate between females and males was found to be slightly negative. The wage or salary data used for the industrial disaggregates is a large percentage of annual 63 and hourly earnings used for occupational disaggregates. In this latter group, it was also feund that the relative hourly earnings position of approximately 33 percent of the female labor force in 1971 deteriorated, Clerical and Kindred workers from 1962 to 1971 incurred an annual average percentage decrease of .89 percent in their relative hourly earnings. These losses, however, were offset by the average annual percentage in- crease in the relative hourly earnings of 2.69 percent for females in Service, except Private Household workers. In 1971 approximately 18 per— cent of the female labor force was situated in this occupation. The average annual percentage increase in the number of females employed in the former occupation was 3.39 percent and that of the latter was only 1.16 percent. This would tend to suggest that at some point in the future, if relative gains and losses continue as over the 1962-71 period, the average annual percentage change in the relative hourly earnings between females and males may become negative. For now, however, it is accepted as positive. CHAPTER 4 AGGREGATE TRENDS AND THE IMPORTANCE OF RELATIVE HOURLY EARNINGS AND HOURS WORKED BETWEEN HUSBANDS AND WIVES IN THE ECONOMY 1.0 Introduction This chapter provides an empirical foundation to examine three related questions. First, what are the recent trends in: (a) the ratio of aggre- gate wives' earnings to that of their husbands; (b) the relative hourly earnings between wives and husbands; and (c) the relative quantities of labor supplied between wives and husbands? Secondly, what proportion of the gap between the aggregate earnings of wives to that of their husbands' is attributable to the other trends -- changing relative hourly earnings between spouses and/or relative quantities of labor which they supplied. Finally, in the event that changing relative hourly earnings and/or rela— tive quantities of labor supplied are contributing substantially to the earnings gap between husbands and wives, what proportion of these changes are reflections of occupation shifts in their work? 2.0 Aggregate Earnings of A11 Husband and Wife Families Aggregate earnings of all husband and wife families (EFAM) are iden- tically equal to the aggregate annual earnings of all husbands (EH) and the aggregate annual earnings of all wives (EW). Furthermore, the aggre- gate annual earnings of either all husbands or wives is equal to the pro— duct of hourly earnings (W) and the average number of hours worked per year (H) for all husbands and wives; algebraically, 64 65 t _ t t t t EFAM - Wh Hh + Ww Hw , (4.1) where husbands are represented by the subscript h; wives by the subscript w; and the time period by the superscript t. Dividing both sides of Equation (4.1) by the aggregate earnings of all husbands; t t _ t t t t EFAM /EH - l + [(Ww Hw)/(Wh Hh)]' (4.2) O I I t t rearranging and solv1ng Equation (4.2) for Wfi/Wh: t t _ t t t t Ww/Wh — [(EFAM /EH ) llth/Hw]. (4.3) . . t _ . . Substituting EFAM : EFt + EHt into Equation (4.3): tt: tttt Ww/wh _ [(EW /EH )(Hh/Hw)]. (4.4) Equation (4.4) contains all three of the desired ratios (EWt/EHt), the ratio of aggregate wives' earnings to that of their husbands'; (HE/H5), the relative number of hours worked per year or the relative quantities of labor supplied by both husbands and wives; and (Wt/WE), the overall rela- tive hourly earnings between all wives and husbands. Annual estimates for the median EWt and the median EHt are easily con- structed from aggregate income data, but following the procedure in Chap- ter 3, a weighted average is used to correct for data insufficiencies. Estimates for either Hfi/H: and WS/Wfi, however, are not easily accessible since they have to be constructed from the disaggregated occupational data as in Chapter 2. Again disaggregate hourly earnings for husbands and wives do not exist as was true for all males and females. Information on the average number of hours worked per year by spouse is derived by using the average number of hours worked per year by males and females in a particular occupation. The total number of hours worked per year by all husbands and all wives is equal to the product of this occupational proxy for the average 66 number of hours worked per year by males or females and thernmber of hus- bands or wives in that occupation. Aggregating across all occupations by spouse gives the total number of hours supplied by husbands, HE; and the total number of hours supplied by wives, H5. The ratio of H: to H: is expressed as follows: n 2 .HPYt - .Qt ._ i h i h t t i—l Hh/H = , w n t t Z .HPY ' .Qw . i w 1 i=1 where H the total number of hours supplied, HPY = the average number of hours worked per year approximated from the occupational data, Q = the total number of workers employed, t = the year, h = husbands, w = wives, i = the ith occupation, n 11. By substituting Equation (4.5) into Equation (4.4), the aggregate annual relative hourly earnings between wives and husbands, Ws/Wfi, can be deter- mined for all husband and wife families in the economy. With the appro- priate data for 1962 through 1971, all three ratios in the first question of this chapter can be examined. Minor modifications of Equation (4.4) are necessary in order to exa- mine the second question: What proportion of the gap between aggregate wives' earnings and that of their husbands is attributable to the other trends -- changing relative hourly earnings or hours worked between hus- bands and wives. Taking the first difference of the natural log and rearranging: 67 t t _ t t _ t t ALn(EW /EH ) — ALn(Ww/Wh) ALn(Hh/Hw). (4.6) Equation (4.6) now gives the percentage change in each one of the ratios -- EWt/EHt t/Ht and Wt t B findin the varian e ' h t 't i , Hh w' w/wh° y g c in eac erm, i 5 possible to determine how much of the variance in the percentage change in the earnings gap between wives and husbands is explained by the variances of the percentage changes in the other two terms on the right-hand side of Equation (4.6). t t t t t t VarlALn(EW /EH )1 - Var[ALn(Ww/Wh)] + Var [ALn(H.h/Hw)] t t t t - 2Cov[ALn(Ww/Wh) , ALn(Hh/Hw) ] , (4.7) then dividing each side of Equation (4.7) by the left—hand term; t t t t 1 = Var [ALn(Ww/Wh)] Var [ALn(Hh/Hw)] Var [A Ln (EWt/EHt) I Var [A In (mt/Eat) ] -2COV[ALn (wt/WE) , ALn (HE/H5” . (4.8) Var [ALn (mt/Eat” Equation (4.8) indicates how much of the variance in the percentage change in the ratio of aggregate wives' earnings to that of their husbands is explained by the variance in the percentage change in the relative hourly earnings between wives and husbands, by the variance of the percentage change in the relative quantities of labor supplied by both spouses, and the covariance between their relative hourly earnings and quantities of labor supplied. The development of Equation (4.8) should indicate which forces -- relative hourly earnings, relative quantities of labor supplied, or their interaction -- are having the greatest impact upon the percentage change in EWt/EHt. Finally, given that relative hourly earnings between wives and husbands and/or their respective quantities of labor supplied are influencing the earnings gap between wives and husbands; indices need to be constructed 68 as in Chapter 2 for all husbands and wives to measure the direction and impact of occupational shifts. Unlike the previous chapter, there are only two Laspeyres indices and two Paasche indices. The two Laspeyres indices are a husbands' hourly earnings index and a wives' hourly earnings index; similarly for the Paasche indices. If the Paasche indices are very close to the Laspeyres indices then very little occupational shifting is occurring. On the other hand, if the Paasche indices are greater than the Laspeyres indices, then husbands and/or wives are moving into higher paying occupations. A weighted average of the wives' hourly earnings and that of their husbands shows the impact of any occupational shifting. Taking the ratio of the two weighted averages as follows: n 2: .wt - .Ht . i w i w i=1 n t z .Ht w'w i=1l w —'t'= n r ' (409) W t t h .2 iwh uh i=1 n t .2 iHh i=1 ('1' where Wi/W the relative wage between all wives and husbands, S 5 II the wage rate, £ ll wives, h = husbands, t = the year, i = the ith occupation, n = 11. Equation (4.9) is calculated using current hours and hourly earnings, then it is recalculated first using current hourly earnings and base year 69 hours and then using base year hourly earnings and current hours. The difference in estimates of relative hourly earnings between wives and husbands using current hourly earnings and hours worked and some combina- tion of base year hourly earnings or hours worked shows the impact of occu- pational shifting by husbands and wives upon WE/Wfi. 3.0 The Data - Sources and Alterations 3.1 Sources The data necessary for the models presented came from two sources. First, hourly earnings and hours worked are taken from Chapter 3. As pre- viously mentioned the number of hours worked per year by a wife is approxi- mated by the average number of hours worked per year per female in her occupation. Correspondingly, the husband's hourly earnings and hours worked are approximated. Second, the marital labor force participation rates, EENt, are derived from the number of husbands and wives in a par- ticular marital labor force participation pairing. This information was found in "Marital and Family Characteristics of WOrkers," another annual Special Labor Force Report published by the Department of Labor/Bureau of Labor Statistics [18]. The data, like those in Chapter 2, were originally obtained from the Current Population Survey. Two tables -- "Occupation Groups of Employed Married Women, Husband Present by Employment Status and Occupation Group of Husband, March 19 ," and "Employment Status of Married Women, Husband Present, By Employment Status and Occupation Group of Husband, March 19 " -- were combined to encompass the employment statuses of all husband and wife families in the U.S. from 1962 to 1971. 3.2 Alterations Given the data above a husband and/or his wife may be employed, unem- ployed, or not in the labor force. If they are employed, each falls within 70 one of the 11 occupations. If either is unemployed or not in the labor force, he or she is lumped into one category: not in the paid labor force. Those husbands and/or wives in this category have zero earnings. Thus with 11 occupational categories and one for not in the paid labor force, there are 144 possible marital labor force participation pairings, each of which has a marital labor force participation rate. 4.0 Relative Hourly Earnings and Hours Wbrked Between All Husbands and Wives in the Economy The ratio of aggregate wives' earnings to that of their husbands in- creased over the period of 1962 to 1971. The annual estimates for EWt/EHt rose from .17 in 1962 to .21 in 1971 as shown in Table 17. The average TABLE 17 The Ratio of Aggregate Wives' Earnings to That of Their Husbands', EWt/EHt, For All Husband and Wife Families, From 1962 to 1971 Year EWt/EHt 1962 .17 1963 .17 1964 .17 1965 .18 1966 .17 1967‘ .18 1968 .19 1969 .19 1970 .20 1971 .21 . . t t . annual percentage increase in EW /EH was 2.47 percent. Comparing these . t t t t . . . estimates of EW /EH to EF /EM in Table 3 showed that working wives earned a smaller proportion of aggregate family earnings, than all females earn of aggregate earnings. Although the initial difference between the esti— t t t t . . mates of EW /EH and EF /EM in 1962 was approx1mately 3 percent, by 1971 the difference had widened to approximately 6 percent. 71 Considering just those families in which both the husband and wife worked a substantially different estimate of EWt/EHt occurred. Table 18 contains the estimates for this subpopulation of all husband and wife families. For this particular subpopulation, the annual estimates of TABLE 18 The Ratio of Aggregate Wives' Earnings to That of Their Husbands', EWt/EH , for Families in Which Both Husband and Wife work, From 1962 to 1971 Year EWt/EHt 1962 .45 1963 .44 1964 .45 1965 .47 1966 .43 1967 .44 1968 .45 1969 .43 1970 .44 1971 .44 EWt/EHt remained relatively constant from 1962 with .45 percent to .44 percent in 1971. Comparing these estimates of EWt/EHt to EFt/EMt in Table 3, it can be seen that working wives earn a larger proportion of aggregate family earnings, than all females earn of aggregate earnings. In contrast to the estimate of EWt/EHt for all husband and wife families, the gap between EWt/EHt for just those families in which both husbands and wives worked and EFt/EHt decreased over the period. Aggregating the number of hours worked by all husbands and comparing it to the number of hours worked by all wives across the possible marital labor force participation pairings, showed that the relative quantity of hours supplied was decreasing. Table 19 shows that all husbands worked about four to five times the number of hours than did their wives. The 72 continual average annual percentage decrease of 2.06 percent indicates a disproportionate increase in the relative number of hours supplied by wives. Again, the literature on labor force participation rates of married women would anticipate these findings. TABLE 19 The Relative Number of Hours Supplied by Husbands To That Supplied by Wives, Hfi/Hs, for All Husband and Wife Families and For Those in Which Both Werked, From 1962 to 1971 All Husband and Families in Which Year Wife Families Both Worked 1962 5.38 1.97 1963 5.31 2.01 1964 5.24 2.02 1965 5.13 1.99 1966 5.14 2.05 1967 4.93 2.03 1968 4.77 2.06 1969 4.66 2.07 1970 4.57 2.10 1971 4.47 2.08 In contrast, Table 19 also shows that the relative number of hours supplied in the subpopulation of families in which both worked increased slightly. In addition this ratio, Hfi/HE, was slightly below that for the entire labor force, Hi/Hz, found in Table 4. This is probably because single men work fewer hours than married men. Using the appropriate estimates for EWt/EHt in Tables 17 and 18 and those for HE/H: in Table 19, Equation (4.4) is solved for wi/Wfi. Table 20 presents the results for all husband and wife families and for those families in which both worked. The relative hourly earnings for all wives and husbands were consistently higher for families in which both worked than in all husband and wife families. The difference, however, was slight. The average annual percentage change in the latter group was only .41 percent. 73 TABLE 20 Relative Hourly Earnings Between Wives and Husbands, Wfi/Wfi, for All Husband and Wife Families and for Those in Which Both werked, From 1962 to 1971 A11 Husband and Families in Which Year Wife Families Both worked 1962 .89 .89 1963 .89 .89 1964 .90 .90 1965 .93 .93 1966 .89 .89 1967 .90 .90 1968 .92 .92 1969 .89 .89 1970 .91 .92 1971 .92 .93 The percentage changes in WE/W: for both groups followed the same pattern. This demonstrates that the association between the wife's hourly earnings and that of her husband's is not only a positive one as Mincer notes, but also a very consistent association. The question to be posed now is how the percentage change in the ratio of aggregate wives' earnings to that of their husbands' (EWt/EHt) is asso- ciated with the percentage changes in the relative number of hours supplied annually by all husbands to that of their wives (Hi/H5), or to the percen- tage changes in the relative hourly earnings between them (WS/Wfi). Using Equation (4.8), the following results in Table 21 were obtained. The factor TABLE 21 The Relative tImportance of the Variance in the Percentage Change of (Hh/Hw),( (Wt/Wh), and the Cov(Hh/Hw, Ww/Wh) in Explaining the Variance of EW t/EHt, From 1962 to 1971 varlALn(EWt/EHt)] .00117061, 100.00 Percent VarlALn(Hh/H:)] = .00015733, 13.44 Percent VaerLn(W:/W E)] = .00070130, 59.91 Percent t t t t Cov[ALn(Hh/Hw), Ln(Ww/Wh)] = .00015975, 27.29 Percent 74 contributing the most variance in the percentage change in the ratio of aggregate wives' earnings to that of their husband was the variance in the percentage change in the relative hourly earnings between all wives and husbands. The variance in the percentage change in WE/W: is 60 percent as large as the variance in the percentage change of EWt/EHt. The second largest factor was the covariance in the percentage change between Hfi/H: and Wt/W: which was 27 percent as large as the variance in the percentage change of EWt/EHt. As in the model for all males and females, the variance in the percentage change in Hfi/H: amounts to only 13 percent of the variance in the percentage change in EWt/EHt. All of these findings are very simi- lar to those for the entire labor force. Unlike the covariance term found for all males and females in the labor force, as previously presented in Table 14, the covariance term for all husband and wife families was negative. This is interpreted to mean that if the percentage change in Hfi/H: is positive, then the percentage change in Wt/Wt is negative. Inverting HIE/Ht to Ht/Ht makes the covariance w h w w h term positive, which, in turn, means that if the percentage change in t . . . is also pOSitive. t t . . . . t Hw/Hh is pOSitive, then the percentage change in ww/Wh Thus if the relative number of hours supplied by wives to that supplied by their husbands increases, the relative wage between wives and husbands increases -- and vice versa. The difference in behavior for all husband and wife families and the entire labor force with respect to the covariance term could be the result of changes in supply and demand forces. For all wives, if the demand for the labor increased, a rise in their relative hourly earnings and hours worked is expected, and conversely. For all females, however, as the supply of their labor increases, a decrease in their relative hourly earnings is expected, and conversely. In short, 75 all wives may be moving along their supply curve while all females may be shifting their supply curve. Whether or not there has been any appreciable movement over the period among occupations by husbands and/or their wives can be surmized from the Laspeyres and Paasche indices. The Paasche indices in Table 22 are slightly smaller than the Laspeyres indices indicating that husbands and wives are moving into relatively lower paying occupations. This may indeed be the TABLE 22 Laspeyres and Paasche Hourly Earnings Indices for All Wives and A11 Husbands, From 1962 to 1971 Laspeyres Paasche Year Husbands Wives Husbands Wives 1962 1.00 1.00 1.00 1.00 1963 1.04 1.06 1.04 1.06 1964 1.07 1.11 1.07 1.11 1965 1.09 1.17 1.09 1.16 1966 1.16 1.19 1.15 1.18 1967 1.22 1.26 1.21 1.25 1968 1.30 1.38 1.29 1.38 1969 1.43 1.47 1.42 1.46 1970 1.53 1.61 1.52 1.60 1971 1.62 1.71 1.61 1.71 case, since one out of every three married women work in Clerical and Kindred workers, which was shown in Chapter 3 to be an occupation where females in general were incurring relative hourly earnings losses. Table 23 contains the weighted averages to show the impact of the shifting. By wives staying in their 1962 employment patterns, and the hourly earnings varying, the relative hourly earnings between all wives and husbands would have been greater than found by using current hourly earnings and hours worked. On the other hand, if hourly earnings were held constant while employment varied, then the relative hourly earnings 76 between all wives and husbands would have been smaller than those in current terms. TABLE 23 Weighted Averages of the Relative Hourly Earnings Between All Wives and Husbands, From 1962 to 1971 Current Hourly Current Hourly Base Hourly Earn— Earnings and Earnings and Base ings and Current Year Hours worked Hours Worked Hours Werked 1962 .89 .89 .89 1963 » .89 .91 .87 1964 .90 .93 .87 1965 .93 .95 .87 1966 .89 .91 .86 1967 .90 .92 .87 1968 .92 .95 .86 1969 .89 .91 .87 1970 .92 .94 .87 1971 .92 .94 .87 This tends to indicate that if wives had not incurred the relative losses of all females in hourly earnings in Clerical and Kindred workers, the relative hourly earnings between them and their husbands would have Ibeen greater. At the same time, the larger proportion of working wives in Professional, Technical, and Kindred workers; in Managers, Officials, .and Proprietors; and in Operatives and Kindred workers has kept relative liourly earnings between wives and husbands from falling even more. The 1:hird column of Table 23 indicates how low relative hourly earnings between vwives and husbands would have gone if females as a whole had not made rela- tive hourly earnings gains in the above mentioned occupations. As a matter of reference, Table 24 contains the occupational distribution of the female and Inale labor forces and that of all wives and husbands. 5-0 .A Conditional Probability Distribution of Husbands and Wives 'The stability of the consistent association between what a wife can earn_ On an hourly basis as compared to that of her husband depends on the 77 TABLE 24 The Occupational Distribution of All Females, All WOrking Wives, All Males and All working Husbands In 1971 By Percentage of Totals in Each Occupation All Females A11 Wives All Males All Husbands Professional 13.78 15.87 12.95 14.37 Managers 4.02 5.23 12.01 17.65 Clerical 32.95 33.16 6.70 6.06 Sales 7.47 7.43 6.00 6.06 Craftsmen 1.18 1.20 20.21 21.55 Operatives 13.42 14.48 18.59 17.75 Private Household 5.16 3.41 .07 2.34 Service 18.07 16.80 8.78 4.42 Laborers .87 .91 9.00 5.21 Farmers .47 .17 3.10 3.56 Farm Laborers 2.61 1.27 2.58 .96 78 socioeconomic factors, somewhat divorced from the market. If Pij represents the conditional probability that a wife is in the jth occupation, given that her husband is in the ith occupation, then a two-way analysis of variance model can be used to test which factors determine Pij’ The model is as fellows: = 11+ 01 + Bj + Yi‘ + 8.. (4.10) Pijk 3 13k' Pijk is first a positive function of u, the overall mean for all husband and wife families. This mean is the probability that any given husband and wife will find themselves in a particular marital labor force partici- pation pairing, 13. To this probability is added the probability that any husband is in the ith occupation, ai. Correspondingly, Bj represents the probability that any wife may find herself in the jth occupation. ai is considered the fixed row effect, while Bj is the fixed column effect. To these terms, an interaction term, Yij' is added. Yij represents the pro- bability that given the husband's occupation, the family will be in any of the remaining labor force participation pairings, ij. Finally, Eijk is the error term. The conditions of Equation (4.10) are the following: i 12 1) 2 di = 0, i=1 12 2) Z 8. = O, j=1 3 12 12 and 3) Z Z Yi' = 0. i=1 j=l 3 The above analysis of variance model involves only two assumptions. First, the column and row effects are nonadditive, the reason for the interaction term. Secondly, the Eijk's are independent random variables, normally . . . . 2 distributed with mean 0 and variance 0 . They represent the extent to 79 which the data depart from the model because of random disturbances. The significance of the ai's, Bj's, and yij's are tested with the F-statistic. After combining the two BLS data sets to derive the marital labor force participation rates, the conditional probabilities were calculated and are summarized in Table 25. These probabilities show that husbands in farm related occupations have the highest probabilities of having a non-working wife. For husbands in Farmers and Farm Managers, moreover, the probability that their wives, if they worked, were also in farm re- lated occupations was a combined total of 14.3 percent. At the other end of the rank ordering, husbands in Professional, Technical, and Kindred workers had a 15.1 percent chance that their wives, if they worked, were in the same occupation. Despite the occupations of most husbands, there was always a good chance that a working wife was in Clerical and Kindred workers. This suggests that wives tend to be in occupations related to those of their husbands. For example, if their husbands are employed in white collar occupations then there is a greater probability that wives, if employed, are in related white collar occupations than in blue collar occupations and vice versa. The analysis of variance model represented by Equation (4.10) con- firms these suspicions. The results were as follows: Source of Sum of Degrees of F- Level of Variance Sguares Freedom Statistic Significance i .000357 11 .1952311 .998 j 41.516239 11 22700.87 <.0005 ij 1.411839 121 70.18058 <.0005 .. .215471 1296 ijk Total 43.143906 1439 80 momom Honda b.5h H. H. H. m.v m.N v.v m. m.H h.v m.H m.N onm ecu CH uoz m.Nh m.m v. m. H.m o.m N.v H. o.H N.m N. m.H mumuonmq Show v.00 m.mH o.H H. v.m o.H 0.4 v. v.H m.m H.H m.m mnoeumm m.mo m. N. m. N.m o.m b.m m. h.H H.h m. h.H muoHOQMA o.mm H. o. N. o.mH m.v m.m m. m.N m.m v.H v.m mofl>umm . . . . . . . . . . . . oHonmm5om m mm H o m o m H H m m m m m H 0H m H w v mum>Hum m.Hm m. o. m. «.5 o.m «.HH c.m m.m m.OH H.H v.m mmeeumumao h.m© N. H. N. N.@ m.H m.h o. m.N m.NH v.H v.m coEmummnu m.om o. o. H. o.v m. h.N v. m.v m.oH v.N m.h monm H.mm H. o. H. m.m o.H m.m w. N.m b.mH o.N m.m HmoHuoHO m.Nm H. o. H. v.m e. o.N v. @.v m.mH v.v N.© mnommcmz h.vw H. H. o. m.N m. m.H m. H.N v.NH m.H H.mH Hmconmwwonm m. e a e m... .. a. a n n n a. m w. n 8.8... 1 1.1. m.m m x n I. a e T. e u 0 mo m p r. 1 e 1 m. a m u v... m u. m a. g.u a 1 a o u.3_ 4 o a s coHumm m. .4 m s m a m. a I. m e 1 s I5ooO u. p m u I s m. 85. 1 a s w mo I coHumm5ooo HhmH ou NomH .mmHHHamm wMHz can ocmnm5m HHd mo soHu5nHHumHo HHHHHnmnoum HchHuHocou 0:9 mm mqm¢9 81 The ai's were insignificant. The husband's occupation had no direct influence on the conditional probability that a wife was in the ith occu- pation, given that of her husband. The Bj's, however, were significant. This is interpreted to mean that the distribution of working wives as found in Table 25 is not by chance. The interaction term, Yij’ was also significant,meaning that the husband's occupation places his wife on the low or high end of the rank ordering of female occupations, the Bj's. As suggested, white collar husbands tend to have white collar wives and vice versa. Wt/W: is highly correlated because males and females pick mates with similar socioeconomic backgrounds, and therefore their occupational opportunities are very similar. 6.0 Summary and Conclusions In this chapter it was found that the relative number of hours supplied by all husbands to that supplied by all wives, Hfi/HE, was decreasing. This result is very similar to that found in Chapter 3 for all males and females. A different result, however, arises when just families in which both hus- band and wife worked are considered. The relative number of hours supplied between husbands and wives was gradually increasing. Thus H:/H: in Equa- tion (1.5) is steadily decreasing. For this to occur despite the increased labor force participation of wives, the number of wives taking part-time jobs must be significant. Relative hourly earnings between all wives and husbands was found to have increased slightly. In addition the estimates of between all wives and husbands were found to be very high -- that is, the wife's hourly earnings was approximately 90 percent of her husband's. The analysis of variance model showed that this relationship was relatively stable since 82 the occupational opportunities available to a wife were dependent upon those opportunities available to females in general and the socioeconomic characteristics of her husband. CHAPTER 5 THE CONTRIBUTIONS OF MARRIED WOMEN TO AND THE EFFECT OF RELATED FACTORS ON THE DISTRIBUTION OF AGGREGATE FAMILY EARNINGS 1.0 Introduction At the beginning of this study an identity as represented by Equation (1.5) was introduced to show the impact of the increased labor force participation of married women, the relative hourly earnings be- tween all wives and husbands, the relative number of hours supplied by wives and husbands, the relative hourly earnings between all males and females, and finally, the relative number of hours supplied between all males and females on the distribution of family earnings. The purpose of this chapter is to integrate the findings of the previous chapters, to determine aggregate family earnings and its distribution, and to deter- mine the impact of the above five factors on this distribution. In brief, the evidence in Chapter 3 led to the following conclusions. First the relative number of hours supplied by all males to that supplied by all females is decreasing. Furthermore, it was found that the relative hourly earnings between all females and males was increasing slightly. The industrial wage or salary income data, however, suggests that this may be only a temporary phenomena, since relative wages between females and males in the labor force had a negative average annual percentage change. The proportion of earnings that is wage or salary income is the predominant factor in drawing this conclusion. Finally, the Paasche and 83 84 Laspeyres indices for males showed very little occupational shifting as defined as males either moving into relatively higher or lower paid occu- pations. The impact of the absolute increases indicated by the Paasche and Laspeyres indices can be assumed equally distributed, thus (WE°H:) scalarly increased across all occupations. Chapter 4 considered the related factors that pertained to all hus- band and wife families. It was found that for those families in which both husband and wife worked, the relative hourly earnings between all wives and husbands had a positive average annual percentage change. In contrast to the entire labor fbrce, the relative number of hours supplied by all husbands to that supplied by wives in those families in which both worked was found to have positive average annual percentage changes. The in- creased labor force participation of married women is an established fact and needs no further documentation. Finally, it was found using the con- ditional probability distribution that a wife's hourly earnings is highly correlated with that of her husband's and that this relationship is rela- tively stable over time. Aggregate family earnings were calculated using Equations (1.2), (1.3), and (1.5). Gini coefficients were calculated for each year (see Appendix B). Then as outlined in Chapter 1, the increased labor force participation of married women and the other five related factors were separately held constant while all else varied to generate six adjusted Gini coefficients. Two other measures of income equality are used to help interpret the Gini coefficients. First, to illustrate the subtler changes that are taking place -— in particular, the extent to which high income females are working as compared to low income females -- the quintile distribution of hours worked and earnings received are explored. Second, 85 in order to see if these subtler changes are making families relatively better or worse off, absolute and relative measures of income equality are also employed. Finally, if the identity in Equation (1.5) proves to be adequate then the impact of various related factors and the increased labor force participation of married women 0n the distribution of family earning can be determined. 2.0 Aggregate Family Earnings and Its Distribution Aggregate family earnings, AEFAMt, as calculated in Equation (1.3), are presented in Table 26. Over the ten-year period they have continued to increase and have almost doubled while the number of husband and wife families has increased only 4 percent. The Gini coefficient of aggregate TABLE 26 Aggregate Family Earnings, AEFAMt, and Husband and Wife Families in Thousands, From 1962 to 1971 Number of Husband Year AEFAMt and Wife Families 1962 196,366,954 40,309 1963 208,689,081 40,836 1964 220,424,357 41,142 1965 232,415,584 41,501 1966 ’ 253,377,545 41,954 1967 271,043,547 42,395 1968 297,684,416 43,057 1969 326,014,396 43,559 1970 347,297,306 44,029 1971 359,055,128 44,445 family earnings as calculated for each year are presented in Table 27. As a Gini coefficient approaches one, the earnings distribution is be- coming more disperse. The Gini coefficients in Table 27 range from .31125 in 1968 to .34139 in 1971. Thus, over the ten-year period variation is relatively small and cyclical in character. The stability of these Gini 86 TABLE 27 Gini Coefficients for Aggregate Family Earnings, AEFAMt, From 1962 to 1971 Year Gini Coefficient 1962 .3249 1963 .3258 1964 .3225 1965 .3179 1966 .3120 1967 .3138 1968 .3113 1969 .3180 1970 .3211 1971 .3414 87 coefficients can be deceiving since identical Gini coefficients can be derived from two very different Lorenz Curves. The actual plotting of the underlying Lorenz Curves for selected years helps to detect subtler changes. Figure 2 contains such plots for 1962, 1966, and 1971. The Lorenz Curves show that the lower income families gained in their share of aggregate family earnings between 1962 and 1966, but by 1971 had lost even more than the original gain. The percentage of aggregate family earnings received by the higher levels of family earnings continued to increase over the entire time period. Figure 2 also suggests that the family earnings level for about 10 percent of all families -- those between 70 and 80 percent of all families -- has a special significance. The Lorenz Curve pivots in this region. The families that fall before the focal point have incurred relative losses, while those after this point seem to have made relative gains over the period. Dividing the Lorenz Curves into quintiles shows where and how these gains and losses were incurred. Thus, the horizontal axis of the Lorenz Curve is partitioned into five equal sections or quintiles. Each section contains 20 percent of all husband and wife families. Similarly the ver- tical axis is partitioned such that each quintile of husband and wife families received their respective amounts of aggregate family earnings. The underlying disaggregate data used to calculate AEFAMt also gave the number of hours supplied by each quintile as found in Table 28. From 1962 to 1971 the percentage of aggregate family earnings received by Quintiles IV and V increased by about 1 percent each. Quintiles I and III each lost about .5 percent of aggregate family earnings, while Quin- tile II lost 1 percent. The gain of the top two quintiles was definitely at the expense of the bottom three quintiles. 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I. a x a m. mu m m s y. 4.. mm m 1 S 1 a 03 T. w p. I . 1.0 s s T. A T. s I.3 D. 8 u 03 S Uh... Hnma 09 mama 20mm .onacmouoo um mung: na¢ mo eHaHB¢Amm fiddzmm mum madm mUZHZMHB¢Amm ma H '14 JJ ~ . = a n a I a 5 a Year g“ 8 g a. :3 5.. m a. a: u MALES 1962 47.70 39.20 41.60 42.30 43.00 41.00 42.70 1963 47.60 39.20 42.00 42.30 37.60 41.10 42.70 1964 47.30 38.90 41.70 42.10 42.30 40.50 42.40 1965 48.20 39.90 42.60 43.00 42.50 40.90 42.90 1966 47.80 40.00 43.00 43.10 42.10 40.90 42.70 1967 48.20 39.80 42.80 42.90 42.50 41.50 42.50 1968 47.80 39.50 42.70 43.00 41.90 40.80 42.20 1969 47.70 39.70 42.70 42.80 41.50 41.10 42.00 1970 47.00 38.70 41.60 42.10 40.90 40.50 41.50 1971 47.30 39.00 42.00 42.40 41.10 41.10 41.90 FEMALES 1962 32.90 35.30 37.60 38.00 34.30 33.70 36.70 1963 32.80 34.70 37.60 37.80 34.20 33.60 37.00 1964 33.00 34.90 37.20 37.30 33.90 33.10 36.40 1965 33.30 33.40 37.90 37.50 34.00 33.50 36.90 1966 33.60 34.20 38.30 37.60 33.90 33.50 36.60 1967 33.80 35.30 37.90 36.90 33.30 33.90 36.70 1968 34.30 34.70 37.70 37.20 32.80 33.40 36.10 1969 34.70 34.50 37.80 36.80 32.50 33.60 36.10 1970 34.90 33.20 36.90 35.80 31.70 33.00 35.60 1971 34.40 34.10 37.40 36.10 31.80 34.30 36.10 THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR 123 TABLE 0 PER PERSON BY INDUSTRY AND SEX, FROM 1962 TO 1971 : a 2‘ JJ CD 0 -v-I m H -H H g 3 u S m r5 U 0 4U a) I g H 5 U -H w w c H s H m o u o 0-H o 0 +1 ‘H 'H-r-l a) 'v-I H C'H '2 2 a H: E 5 35¢; y... 2" 8 4 Es I: a: Mr; MALES 1962 26.15 34.31 42.91 43.54 35.07 34.37 45.10 1963 25.27 35.60 43.17 43.53 34.74 34.43 45.75 1964 26.08 36.49 43.76 44.08 34.54 34.40 45.58 1965 26.21 37.20 44.01 44.22 34.20 34.78 45.85 1966 30.97 38.18 44.66 44.64 34.77 36.57 45.17 1967 30.49 38.70 44.80 44.58 35.00 36.79‘ 45.83 1968 29.64 38.11 44.62 44.77 34.72 36.21 45.46 1969 28.56 37.68 44.20 43.86 34.01 36.81 44.32 1970 28.68 37.11 43.53 43.62 33.98 35.81 44.81 1971 29.45 36.19 43.72 43.12 33.88 35.96 45.18 FEMALES 1962 13.65 26.21 35.26 35.40 25.00 26.85 34.73 1963 12.33 25.47 35.99 35.89 24.70 26.61 35.81 1964 12.81 22.98 36.27 36.40 24.48 26.77 34.57 1965 14.45 19.75 36.39 37.09 24.98 26.97 33.74 1966 18.54 24.42 36.42 36.93 25.31 28.16 32.31 1967 15.85 30.64 36.87 35.67 26.47 28.81 34.15 1968 14.43 31.86 36.48 35.35 25.54 28.61 34.73 1969 16.65 31.66 35.47 35.34 24.87 28.76 34.99 1970 16.33 32.56 35.35 35.05 24.56 28.80 31.87 1971 17.29 34.66 35.90 36.38 25.31 29.20 33.87 124 TABLE P THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER PERSON BY INDUSTRY AND SEX, FROM 1962 TO 1971 a a 2* u m o -H 3 s :1 a m :0 1: o p m m I : F1 5 o -a m m c H a n a 3: . a 222 -H m s Hiya 'U a rA-H u 3‘ a g '3 3 3 m 'Svfi 8 Year :6: 8 0423 B m (1.44.) MALES 1962 1247.25 1345.15 1785.15 1841.83 1508.00 1409.32 1925.94 1963 1202.83 1395.50 1813.19 1841.41 1306.21 1415.26 1953.37 1964 ,1233.48 1419.33 1825.00 1855.90 1461.16 1393.39 1932.48 1965 1263.26 1484.22 1874.98 1901.54 1453.51 1422.67 1966.86 1966 1480.21 1527.09 1920.59 1924.07 1463.97 1495.52 1928.72 1967 1469.80 1540.29 1917.60 1912.47 1487.31 1526.95 1947.84 1968 1416.93 1505.30 1905.30 1924.95 1454.68 1477.77 1918.46 1969 1362.53 1495.84 1887.50 1877.27 1411.29 1512.94 1861.54 1970 1348.03 1436.26 1810.69 1836.41 1389.70 1450.30 1859.55 1971 1392.88 1411.23 1836.36 1828.30 1392.58 1477.78 1892.96 FEMALES 1962 488.97 925.26 1325.84 1345.31 857.49 904.78 1274.67 1963 404.33 883.85 1353.10 1356.59 844.73 894.25 1325.09 1964 422.65 801.99 1349.13 1357.61 829.87 886.05 1258.37 1965 481.24 659.66 1379.13 1390.76 849.29 903.46 1245.07 1966 622.85 835.24 1394.73 1388.39 852.05 943.43 1182.61 1967 535.87 1081.73 1397.43 1316.09 881.45 976.54 1253.43 1968 495.10 1105.38 1375.32 1315.17 837.56 955.71 1253.70 1969 577.73 1092.20 1340.80 1300.68 808.27 966.23 1263.30 1970 569.90 1081.03 1305.34 1254.85 778.48 950.45 1134.57 1971 594.94 1181.98 1342.74 1313.49 804.81 1001.65 1222.56 TABLE Q THE NUMBER OF WORKERS EMPLOYED BY INDUSTRY AND SEX, FROM 1962 TO 1971, IN THOUSANDS >1 0‘ H C1 C 4“ CI) 0 -r-'| U) H 'H H :3 D «U :5 U) C vs 4.: 0 u w m 0 C H :3 U 'H Q) -:-l H :3 H m 0 JJ 0 U I JJ 0 «U ‘H -H 'r-i <1) H ~r-i 5: ‘0 'H U) :5 H H 'U a H H a s s a '3 a . a 5‘ a Year :2: u z a. :> t—« m o. n: "4 MALES 1962 2716 4011 13855 3817 7365 7701 2737 1963 2606 4018 14395 4037 7212 7778 2798 1964 2577 4272 14563 3972 7631 8108 2741 1965 2528 4337 15142 3876 7807 8304 2674 1966 2146 4293 15613 3940 8089 8344 2935 1967 2221 4268 15619 4184 8022 8903 2943 1968 2660 4432 16004 4082 8055 8969 3301 1969 2053 4690 16387 4119 8302 9244 3332 1970 2051 4689 15634 4346 8854 9889 3162 1971 2134 5102 15232 4547 9240 10275 3204 FEMALES 1962 838 224 5678 894 6097 12686 1181 1963 803 198 5681 879 6146 13373 1245 1964 821 229 5801 871 6381 13764 1295 1965 781 219 6155 980 6486 14475 1350 1966 635 245 6635 2053 6938 14798 1453 1967 589 252 6913 1143 7284 14972 1566 1968 605 243 6815 1230 7264 16024 1687 1969 523 259 7253 1283 7511 16585 1690 1970 541 281 6906 1294 7928 17054 6906 1971 565 339 6721 1263 8082 17396 1499 126 TABLE R THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY INDUSTRY AND SEX, FROM 1962 TO 1971, IN THOUSANDS :1 a 8‘ u m o H a, H «I H :3 :3 +3 :3 U) .U u u u a) I c '5 3 8 0:3 8 0-8 5 H o 4) tn «4 H a) «a -1 c: H n 2 a 5: g z g3: mu 2 a g .5 a a ..s MALES 1962 3387518 5395376 24733308 7030275 11106448 10853158 5271303 1963 3134569 5607112 26100851 7433760 9420420 11007929 5465529 1964 3178665 6063398 26577459 7371645 11150107 11297582 5296922 1965 3193511 6437048 28390906 7370375 11347557 11813820 5259393 1966 3176527 6555813 29986130 7580842 11842026 11478578 5660801 1967 3264422 6573966 29951057 8001775 11931211 13594186 5732499 1969 2797267 7015484 30930434 7732474 11716505 13982616 6202640 1970 2764816 6734629 28308300 7981056 12304430 14341980 5879886 1971 2972398 7200074 27971468 8313283 12867406 15184201 6065036 FEMALES 1962 376235 207258 7528140 1202708 5228102 1147862 1505391 1963 324673 175003 7686956 1192442 5191703 11958766 1649742 1964 346993 183656 7626284 1182482 5295385 12195590 1629590 1965 375849 144465 8488541 1362949 5508512 13077640 1680642 1966 395512 204634 9254054 1461976 5911535 13960820 1718327 1967 315625 272596 966040 1504289 6420459 14620739 1962874 1968 299537 268608 9372815 1617659 6084034 15314290 2114993 1969 302151 282879 9724811 1668768 6070901 16024902 2134982 1970 308317 303770 9007774 1623778 6171762 16208915 1836873 1971 336140 400692 9024526 1658937 6504471 17424767 1832622 127 TABLE S THE HOURLY WAGE RATE BY INDUSTRY AND SEX, FROM 1962 TO 1971 0" E . s .5 8 E4 '3 8 m '2 3 8 ‘6 .3 8 30 r: H s H m o u o 0-H 0 U U 'H -H ‘H a) -.-4 ,4 g .H '3 2 2 g: "a z 1.. a: Year 2‘ 8 g a. a: a :2: EE :3 MALES 1962 2.05 3.57 3.21 3.11 2.87 3.15 3.02 1963 2.05 3.60 3.25 3.26 3.41 3.26 3.19 1964 2.09 3.69 3.32 3.38 3.10 3.61 3.31 1965 2.34 3.75 3.40 3.48 3.26 3.73 3.42 1966 2.39 3.99 3.49 3.60 3.47 3.74 3.65 1967 2.37 4.11 3.63 3.81 3.66 3.90 3.81 1968 2.65 4.52 3.90 4.00 3.90 4.41 4.11 1969 2.94 5.07 4.27 4.49 4.29 4.62 4.61 1970 3.30 5.54 4.59 4.87 4.66 5.07 5.19 1971 3.11 5.67 4.74 5.19 4.70 5.04 5.43 FEMALES 1962 --- --- 2.31 2.69 2.26 2.29 3.18 1963 --- --- 2.27 2.72 2.33 2.36 3.17 1964 --- --- 2.39 3.01 2.51 2.56 3.45 1965 2.11 4.71 2.35 2.88 2.65 2.66 3.56 1966 1.61 4.74 2.42 2.98 2.64 2.74 3.86 1967 2.23 3.62 2.60 3.37 2.66 2.84 3.80 1968 2.71 3.34 2.82 3.40 2.98 3.16 4.13 1969 2.36 3.85 3.12 3.82 3.08 3.35 4.37 1970 3.73 4.34 3.40 4.22 3.36 3.58 5.13 1971 3.35 4.41 3.42 4.22 3.34 3.87 5.07 TABLE T THE AVERAGE NUMBER OF HOURS WORKED PER WEEK PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 Us I Z” a) S 5 3 U y .,.4 )4 .5 U) U 3 U) c 5 u u u m G O 'U .—I :3 0 -.-I In -H C :3 :4 I6 04-: 0 on H o u w -H-H m -H -H m --I U) :1 .—I.-I 'U > an a s a an a s 813 Year a: u 5: DID E-I m m-H 1962 .69 .90 .90 .90 .80 .82 .86 1963 .69 .89 .90 .89 .91 .82 .87 1964 .70 .90 .89 .89 .80 .82 .86 1965 .69 .84 .89 .87 .80 .82 .86 1966 .70 .86 .89 .87 .81 .82 .86 1967 .70 .89 .89 .86 .78 .82 .86 1968 .72 .88 .88 .87 .78 .82 .86 1969 .73 .87 .89 .86 .78 .82 .86 1970 .74 .86 .89 .85 .78 .81 .86 1971 .73 .87 .89 .85 .77 .83 .86 TABLE U THE AVERAGE NUMBER OF WEEKS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 I 8 . 3 ‘3‘ .5 4J . ' g 8 3 8 In '8: .U IJ o +1 In «:0 .- 2: a :I I. a: s H o 4.: ‘H -r~l-H a) -.-I was H m :1 HH '0 > HH g, 8 5 an 2 B ‘35 year n: u 2: mo c-c m III-r4 1962 .52 .76 .82 .81 .71 .78 .77 1963 .49 .72 .83 .82 .71 .77 .78 1964 .49 .63 .83 .83 .71 .78 .76 1965 .55 .53 .83 .84 .73 .78 .74 1966 .60 .64 .82 .83 .72 .77 .72 1967 .52 .79 .82 .80 .76 .78 .75 1968 .49 .84 .82 .79 .74 .79 .76 1969 .58 .84 .80 .81 .73 .78 .79 1970 .57 .88 .81 .80 .72 .80 .71 1971 .59 .96 .82 .84 .75 .81 .75 129 TABLE V THE AVERAGE NUMBER OF HOURS WORKED PER YEAR PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 0‘ I 3 <1) 8 .5 F 33 H .H I. g m s u s m c p u 0 u w d o n H s U -H w -H c S u m o u 0 U u H U u m -H-H m -H -H m -H m D H H U > H u y E» 8 5 8 ‘3 S 8 8 ‘3 ear 6: U z a. D [4 U) D. 'H 1962 .36 .69 .74 .73 .57 .64 .66 1963 .34 .63 .75 .74 .65 .63 .68 1964 .34 .57 .74 .73 .57 .64 .65 1965 .38 .44 .74 .73 .58 .64 .63 1966 .42 .55 .73 .72 .58 .63 .61 1967 .36 .70 .73 .69 .59 .64 .64 1968 .35 .73 .72 .68 .58 .65 .65 1969 .42 .73 .71 .69 .57 .64 .68 1970 .42 .75 .72 .68 .56 .66 .61 1971 .43 .84 .73 .72 .58 .68 .65 TABLE W THE NUMBER OF FEMALE RELATIVE TO MALE WORKERS EMPLOYED BY INDUSTRY, FROM 1962 TO 1971 h m I c: *3 a .5. '5 "‘ D :1 «OJ 8 In '8 c: c u o u 0 d o a H a U -H m H H :3 m 0 49 U U «U o u m -H-H m -H -H m -H m 5 H H v > H H 8 5 g 8 ‘5' fl 3 9 ti Year ‘2 8 a. D [.I U) DI H 1962 .31 .06 .41 .23 .83 1.65 .43 1963 .31 .05 .39 .22 .85 1.72 .45 1964 .32 .05 .40 .22 .84 1.70 .47 1965 .31 .05 .41 .25 .83 1.74 .50 1966 .30 .06 .43 .27 .86 1.77 .50 1967 .27 .06 .44 .27 .91 1.68 .53 1968 .29 .05 .43 .30 .90 1.79 .51 1969 .25 .06 .44 .31 .90 1.79 .51 1970 .26 .06 .44 .30 .90 1.72 .51 1971 .26 .07 .44 .28 .87 1.69 .47 130 TABLE X THE TOTAL NUMBER OF HOURS WORKED ANNUALLY BY ALL FEMALES RELATIVE TO THAT OF ALL MALES BY INDUSTRY, FROM 1962 TO 1971 m I 3 a .5. E 5 g g p g m 5 G u o u 0 ¢ 0 E '3 a a o '3 8 u '3 H o u m -H-H w -H -H m .1 ‘2 a g: E a g 33 Year 2‘ 8 g . s I: a: a. .2 1962 .11 .04 .30 .17 .47 1.06 .29 1963 .10 .03 .29 .16 .55 1.09 .30 1964 .11 .03 .29 .16 .47 1.08 .31 1965 .12 .02 .30 .18 .49 1.11 .32 1966 .12 .03 .31 .19 .50 1.12 .30 1967 .10 .04 .32 .19 .54 1.08 .34 1968 .10 .04 .31 .21 .52 1.16 .33 1969 .ll .04 .31 .22 .52 1.15 .34 1970 .11 .05 .32 .20 .50 1.13 .31 1971 .11 .06 .32 .20 .51 1.15 .30 TABLE Y THE HOURLY WAGE RATE PER FEMALE RELATIVE TO THAT PER MALE BY INDUSTRY, FROM 1962 TO 1971 m I E a, s .5 .5 g Q '3 Q m 5 a g :1 8 4:, .2 a, < .9. H 8 b «“3 .3 f. a) .2 .9. 13’ H m s H H U > H u “ “ E ‘3 'L‘ 2 3‘) ‘3 ‘3 Year g‘ 8 z m D a m m-H 1962 —-- ——- .72 .86 .79 .73 1.06 1963 —-- --- .70 .84 .69 .72 .99 1964 -—- --- .72 .89 .81 .71 1.04 1965 .90 1.25 .69 .83 .81 .71 1.04 1966 .67 1.19 .69 .83 .76 .73 1.06 1967 .94 .88 .72 .88 .73 .73 1.00 1968 1.02 .74 .72 .85 .76 .72 1.00 1969 .80 .76 .73 .85 .72 .73 .95 1970 1.13 .78 .74 .87 .72 .71 .99 1971 1.08 .78 .72 .81 .71 .77 .93 THE MEDIAN ANNUAL WAGE OR SALARY INCOME PER FEMALE RELATIVE 131 TABLE Z TO THAT PER MALE BY INDUSTRY, WOMEN'S BUREAU UPDATE, FROM 1962 TO 1971 >" s: 2‘ I': 5 m o -H -H m H -H H S 5 :s u :1 m s: ’U 4U O «H (D ‘0 C: r—I :1 0 -r4 0) -r1 H :3 H II! 04-! 0 0-9 .3 t3 “3 “:1“: g "‘ :13 I; 5 g as a E ‘31: Year n: u 21 mo 9 m III-H 1962 --- --- .54 .63 .45 .47 .70 1963 —-- --- .52 .62 .44 .46 .67 1964 --- --- .53 .65 .46 .45 .68 1965 .34 .56 .51 .61 .48 .45 .66 1966 .28 .65 .50 .60 .44 .46 .65 1967 .34 .62 .52 .61 .43 .47 .64 1968 .36 .54 .52 .58 .44 .46 .66 1969 .34 .56 .52 .59 .41 .46 .64 1970 .48 .59 .53 .59 .40 .46 .60 1971 .41 .65 .53 .58 .41 .52 .60 APPENDIX B 132 APPENDIX B The Gini coefficient is a measure of concentration that is derived from a Lorenz Curve. A Lorenz Curve is obtained by plotting the cumula- tive percent of some aggregate units -- in this case, all husband and wife families by their annual family earnings level -- on the horizontal against the cumulative percent of aggregate family earnings accounted for by these units on the vertical axis. An hypothetical Lorenz Curve is illustrated in Figure 1. If all families had equal earnings, the Lorenz Curve would be represented by the diagonal -- the line of equality -- in Figure 1. Lorenz Curves drawn from actual data, however, will fall below 100 Cumulative Percentage of Aggregate Family Earnings xi xi+l 100 Cumulative Percentage all Families for a particular EEEFAMt FIGURE 1 A Hypothetical Lorenz Curve for Aggregate Family Earnings 133 the line of equality. The greater the inequality in the distribution of aggregate family earnings, the greater the area between the line of equality and the actual Lorenz Curve. This area is represented by A in Figure 1. If B is the total area under the line of equality, then the Gini coeffi cient is defined as the proportion of B found in A; that is, the Gini coefficient = A/B [13, Miller, pp. 220-221]. Algebraically, P m . . f . . = _ __ _ __ __ + __ Gini coe fiCient 1 772 (xij+1 xinyij ij+1)' ij=1 where m is the total number of marital labor force participation pairings, XI; represents a particular EEEFAMt or family earnings level, and yii re- 9 presents the percentage of aggregate family earnings. [l] [2] [3] [4] [5] [6] [7] [8] [9] [10] [ll] [12] 134 LIST OF REFERENCES :- Budd, Edward C. Inequality and Poverty. New York: W. W. Norton and Company, Inc., 1967. Cain, Glen. Married Women in the Labor Force. Chicago: University of Chicago Press, 1966. Henle, Peter. "Exploring the Distribution of Earned Income." The _ Monthly Labor Review (December, 1972), 16-27. P Metcalf, Charles. "The Size Distribution of Personal Income During the Business Cycle." American Economic Review (September, 1969), 657-668. Mincer, Jacob. "Labor Force Participation of Married Women: A Study of Labor Supply," in Aspects of Labor Economics (Washington, D.C.: National Bureau of Economic Research, 1962), 63-105. "Labor Supply, Family Income, and Consumption." American Economic Review (May, 1960), 574-583. . "The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach." The Journal of Economic Literature (March, 1970), 1-26. Sorenson, Gary W. Income Changes and Labor Force Participation. Corvallis: Oregon State University Press, 1971. U.S. Congress. Joint Economic Committee. The American Distribution of Income: A Structural Problem, by Lester C. Thurow and Robert E. B. Lucas. Washington, D.C.: Government Printing Office, 1972. U.S. Department of Commerce. Bureau of Census. Concepts and Methods Used in Manpower Statistics from the Current Population Survey. Cur- rent Population Report, Series P-23, No. 22. Washington, D.C.: Government Printing Office, 1967. U.S. Department of Commerce. Bureau of Census. Income Growth Rates in 1939 to 1968 for Persons by Occupation and Industry Groups for the United States. Current Population Reports, Series P-60, No. 69, Washington, D.C.: Government Printing Office, 1970. U.S. Department of Commerce. Bureau of Census. Income of Families and Persons in the United States. Current POpulation Reports, 135 Series P-60. Washington D.C.: Government Printing Office, various years. "Occupation-~Median Wage or Salary Income in 19__ and 1939 of Persons in the Experienced Civilian Labor Force, By Work Experience and Sex." 1969. No. 75 Table 63 1970 No. 80 Table 60 1971 No. 85 Table 60 "Industry and Race--Median Wage or Salary Income in 19__ and 1939 of :1 Wage or Salary WOrkers 14 Years Old and Over, By WCrk Experience and Sex." 1969 No. 75 Table 62 1970 No. 80 Table 59 , 1971 No. 85 Table 59 i "Type of Income in 19__: Families and Unrelated Individuals By Wage or Salary Income, Non-Farm Self-Employment Income, Fanm Self-Employment Income, and Income Other Than Earnings, for the United States." 1962 No. 41 Table 13 1963 No. 43 Table 15 1964 No. 47 Table 15 1965 No. 51 Table 15 1966 No. 53 Table 15 1967 No. 59 Table 21 1968 No. 66 Table 32 1969 No. 75 Table 38 1970 No. 80 Table 42 1971 No. 85 Table 42 "Type of Income in 19__: Persons 14 years Old and Over By Wage or Salary Income, Non-Farm Self-Employment Income, Farm Self-Employment Income, and Income Other Than Earnings, for the United States." 1962 No. 41 Table 28 1963 No. 43 Table 32 1964 No. 47 Table 32 1965 No. 51 Table 32 1966 No. 53 Table 32 1967 No. 60 Table 16 1968 No. 66 Table 54 1969 No. 75 Table 61 1970 No. 80 Table 63 1971 No. 85 Table 63 U.S. Department of Commerce. Bureau of Census. Income Distribution in the United States, by Herman P. Miller. Washington, D.C.: Government Printing Office, 1966. [14] [15] [16] [17] [18] 136 U.S. Department of Commerce. Bureau of Census. The Current Popula- tion Survey--A Report on Methodology. Technical Paper No. 7. Washington, D.C.: Government Printing Office, 1963. U.S. Department of Labor. Bureau of Labor Statistics. BLS Handbook of Methods for Surveys and Studies. Bulletin 1711. Washington, D.C.: Government Printing Office, 1971. U.S. Department of Labor. Bureau of Labor Statistics. Earnings and Emplgyment and Monthly Report on the Labor Force. Washington, D.C.: Government Printing Office, various years. n ,_. . t.- "Persons at Wbrk in Non-Farm Occupations by Full-Time and Part-Time Status and Sex." 1966 VOlume 13 No. 10 Table A-24 1967 Volume 14 No. 3 Table A-24 .4 1968 Volume 14 No. 10 Table A—24 a 1969 Volume 15 No. 10 Table A-26 1970 Volume 16 No. 10 Table A-26 1971 Volume 17 No. 10 Table A—26 U.S. Department of Labor. Bureau of Labor Statistics. Division of Employment and Unemployment Analysis: Unpublished data supplied by Curtis Gilroy, 1973. U.S. Department of Labor. Bureau of Labor Statistics. Marital and Family Characteristics of WOrkers. Special Labor Force Report. WaShington, D.C.: Government Printing Office, various years. "Occupation Group of Employed Married WOmen, Husband Present, By Employment Status and Occupation Group of Husband, March, l9__." 1962 No. 26 Table S 1963 No. 40 Table 8 1964 No. 50 Table R 1965 No. 64 Table Q 1966 No. 80 Table Q 1967 No. 94 Table Q 1968 No. 120 Table Q 1969 No. 120 Table Q 1970 No. 130 Table Q 1971 No. 144 Table Q "Employment Status of Married Women, Husband Present, By Employment Status and Occupation Group of Husband, March, l9__." 1962 No. 26 Table R 1963 No. 40 Table R 1964 No. 50 Table Q 1965 No. 64 Table P 1966 No. 80 Table P [18] [19] 137 (continued) 1967 No. 94 Table P 1968 No. 120 Table P 1969 No. 120 Table P 1970 No. 130 Table P 1971 No. 140 Table P U.S. Department of Labor. Bureau of Labor Statistics. Work Experience of the Population. Special Labor Force Report. Washington, D.C.: Government Printing Office, various years. "Industry: Persons With Work Experience in l9__, By Class of WOrker of Longest Job and Sex." 1962 No. 38 Table A-2 1963 No. 48 Table A-2 1964 No. 62 Table A-2 1965 No. 76 Table A-2 1966 No. 91 Table A-2 1967 No. 107 Table A-2 1968 No. 115 Table A-2 1969 No. 127 Table A-2 1970 No. 141 Table A-2 1971* No. --- Table A-2 "Industry of Workers With Part-Time Jobs: Persons With Work Exper- ience in l9__, By Class of Workers of Longest Job and Sex." 1962 No. 38 Table A-3 1963 No. 48 Table A-3 1964 No. 62 Table A-3 1965 No. 76 Table A-3 1966 No. 91 Table A-3 "Wage of Salary Workers and Color: Persons with Work Experience, By Industry of Longest Job in 1967 and Sex." 1967 No. 107 Table A-3 "Industry of Wage or Salary Workers by Color: Percent Distribution by WOrk Experience on Longest Job in l9__." 1968 No. 115 Table A-3 1969 No. 127 Table A-3 1970 No. 141 Table A-3 1971* No. --- Table A-3 "Occupation: Persons With Work Experience in 19__, By Longest Job and Sex." 1962 No. 38 Table A-4 1963 No. 48 Table A-4 1964 No. 62 Table A-5 138 [19] (continued) 1965 No. 76 Table A-5 1966 No. 91 Table A-5 1967 No. 107 Table A-4 1968 No. 115 Table A-4 1969 No. 127 Table A-4 1970 No. 141 Table A-4 1971* No. --- Table A-4 *1971 is available upon request but has not been officially published. [20] U.S. Department of Labor. Wage and Labor Standards Administration. WOmen's Bureau. Handbook of Women Workers. Women's Bureau Bulletin, No. 294. Washington, D.C.: Government Printing Office, 1969.