Working Paper #2013-04 – Why Does the Gender Earnings Gap Vary Across U.S. States? Fixed Effect Models of Male and Female Earnings

Department of Economics
University of Delaware
Working Paper #2013-04

Why Does the Gender Earnings Gap Vary Across U.S. States?

Fixed Effect Models of Male and Female earnings

                                                                                  Saul D. Hoffman  

ABSTRACT

A recent Census Bureau report shows that the gender earnings ratio for year-round full-time workers varies substantially across states, with a range of 24 percentage points.  In this paper, I examine this variation by estimating state-fixed effect models of earnings for men and women, using data from the 2008 and 2009 CPS.  I find that state fixed effects affecting men’s and women’s earnings are persistent, even after control for other variables.  Louisiana has the lowest unadjusted and regression-adjusted gender earnings ratio, while DC and Maine have the highest unadjusted and adjusted earnings ratios, respectively.  States with particularly low overall gender earnings ratios have low ratios even within detailed education and occupation categories.

JEL Codes: J16, J30, J31, J70, J71

Keywords:  Gender Gap, Women’s Earnings, Fixed Effects