Growth in Service Sector Employment and MSA Gender Earnings Inequality: 1970-1980

This study tests contradictory hypotheses regarding the implications of service sector growth in post-industrial societies on gender stratification. Panel analyses of 1970 and 1980 U.S. census data from the largest 124 MSAs reveal that increasing employment in service industries reduces the gender gap in median earnings net of changes in human capital and community variables. Findings also support the “deindustrialization thesis” in that service sector growth is economically detrimental to both sexes. However, men's earnings deteriorate at a faster rate than women's earnings resulting in greater similarity between male and female earnings. The results imply that men in metropolitan labor markets experiencing greater employment in service industries suffer lower earnings because of dwindling high-wage blue-collar jobs. A larger male service sector component also reduces occupational sex segregation, thus helping to equalize the earnings of men and women.