Gender Disparities in Employment and Aggregate Profitability in the United States

Abstract

This paper explores the relationships between aggregate profitability and women's labor market participation in the United States during the 1980s and 1990s. We investigate, using decomposition analysis, whether the contribution of the stagnant or declining share of wages in national income to the upswing in profitability was aided by the growing incorporation of women into employment. Comparisons are made between counterfactual and actual wage shares to assess the relative contributions of gender wage disparity and female share of employment to the changes in the wage share. Additionally, we decompose the change in wage share into distributional changes within sectors and changes in the sectoral composition of aggregate value added to examine whether the effects of gender wage disparity and female share of employment on the aggregate wage share were dominated by the effects of compositional changes.