Existing Estimates Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 568.full

Hubbard 569 have looked to factors that prevented women in the past from exploiting the higher college wage premium for women. Goldin, Katz, and Kuziemko 2006 point to past barriers to women’s education and careers; as these barriers fell, the gender differ- ence in the college wage premium became decisive: “According to most estimates, the college log or percentage wage premium is actually higher for women than men, and it has been for some time. . . . As the labor force participation of women has begun to resemble men’s, women have responded to the monetary returns.” Analogously, Chiappori, Iyigun, and Weiss 2009 combine an exogenous fall in the time required for housework and “the higher labor-market return to schooling for women” to explain the relative rise in women’s college attainment. But what if this stylized fact, the starting point for these arguments, is wrong? I will argue that the college wage premium for women is not larger for women than men, and we must revisit our accounts of the dramatic rise in women’s college attainment relative to men. Most recent estimates rely on Current Population Survey CPS wage data that are “topcoded” or censored at a maximum value. Topcoding biases estimates of the college wage premium downward for males relative to fe- males, and the magnitude of this bias has grown over time. Once I account for this bias, I find no gender difference in the college wage premium in recent years. This paper proceeds as follows. Section II briefly discusses recent estimates of the college wage premiums for men and women. None of these estimates adequately accounts for the bias caused by censoring. Section III presents facts on topcoding and shows how topcoding can bias estimates of the college wage premium. Section IV describes the data set I use in my estimates. In Section V, I reestimate college wage premiums for men and women using CPS data after accounting for topcodes, and show that the college wage premium is not larger for women than for men, at least in recent years. Section VI concludes.

II. Existing Estimates

The near-consensus in the literature has been that college wage pre- miums are higher for women than for men, and have been since at least the 1960s. This claim rests primarily on analysis of the March CPS data series, which, for all years since 1963, provides a continuous series of annual, cross-sectional, nationally representative data on education, earnings, and hours worked. 2 Chiappori, Iyigun, and Weiss 2009 look at white workers age 25–54 during years 1975–2004 and conclude that “women receive a higher increase in wages than men when they acquire college or advanced degrees.” Using CPS data for 1963 to 2001, DiPrete and Buchmann 2006 report an earnings gap of about 0.1 to 0.2 log points among 30–34 year old full-timefull-year FTFY white workers for the entire study period. Charles and Luoh 2003 use CPS data from 1961–97. Comparing those with at least two years of college to those with no college, they find that the wage premium 2. Unless noted otherwise, the years I give for CPS data reflect the year to which the data apply, not the year in which the data were collected for example, data from the March 1964 CPS apply to 1963. The CPS is intended to be a nationally representative survey of the civilian, noninstitutionalized population. 570 The Journal of Human Resources for women is consistently about 0.2 log points higher than for men. Card and DiNardo 2002 use CPS data for years 1975–99 and report college wage premiums for women that are greater than or equal to those of men for all years. Some studies use data sources other than the CPS. Dougherty 2005 runs wage regressions on years of schooling using National Longitudinal Survey of Youth 1979 NLSY79 data and finds higher wage premiums for women throughout the period 1988–2000. He also cites more than 20 other studies that use data sources other than the CPS and find higher “returns to schooling” for women than men. None of these studies, however, looks at data from 1990 or later. Pen˜a 2007 disagrees with these findings, but offers only evidence from outside the United States to support the claim that the college wage premium is higher for men.

III. Topcoding and Topcode Bias