The distribution of male and female earnings 1973-91: Evidence for Britain

This paper analyses the major developments in the structure of male and female pay in Britain between 1973 and 1991. These are the narrowing of the gender pay gap and the increasing inequality of male and female earnings. The first innovation is decomposing the changing gender pay gap into three components: prices, characteristics, and unmeasured (residual) effects at any percentile level of interest to the investigator. An important role for prices in narrowing the gender gap is found and the second innovation is a method to identify which prices are critical. Qualifications turn out to be the key factor.