The Gender Pay Gap by Occupation: A Test of the Crowding Hypothesis

Identified, structural wage equations for seven occupations are estimated to test the crowding hypothesis—that the gender pay gap is due to females being crowded into low-paying occupations—using data drawn from the 1996 wave of the National Longitudinal Study of Youth (NLSY79). Occupational preferences are used to estimate a logit probability model of occupational assignment to create instruments to control for self-selection. Wage equations are estimated for all workers and for full-time, year-round workers. Identical specifications are estimated for private-sector workers. The results are not consistent with a crowding explanation as the sole source of the gender pay gap unless crowding occurs at less aggregated levels of occupations than those used for this study. (JEL J16 , J31 , J71 )