Returns to Skill, Compensating Differentials, and Gender Bias: Effects of Occupational Characteristics on the Wages of White Women and Men

A regression model with fixed-effects and national individual-level panel0 data (1966-81) is used to decompose the sex gap in pay. In accordance with neoclassical predictions from human capital theory, net positive returns to individuals' education and experience and to occupations' cognitive and physical skills are found. While sex differences in experience have large effects on the sex gap skill contributes little to the gap. In accordance with cultural feminist predictions, negative returns to being in an occupation with a higher percentage of females or requiring more nurturant social skill are found. These forms of gendered valuation contribute significantly to the sex gap in pay. In contrast to the neoclassical prediction of compensating differentials, the analysis did not find consistently positive effects for onerous physical conditions, nor did these have much effect on the gap.