Gender Pay Gap in the US Service Industry: A Regression Analysis

1
ECONOMICS ASSIGNMENT

2
Table of contents
Introduction................................................................................................................................3
Literature review........................................................................................................................3
Hypothesis statement.................................................................................................................4
Data analysis..............................................................................................................................4
Economic analysis......................................................................................................................5
Policy recommendations............................................................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

3
Introduction
The gender pay gap is one of the major problems in the world as well as in the United States
of America. The gender pay gap not only violates the basic human rights of the individual but
also indulges in discriminatory practices in daily lives (Flinn, Todd & Zhang, 2018). The
objective of the research is to find out the existing condition of the US economy in terms of
the gender pay gap. The study uses microdata with 8547 observations and carries out a
regression analysis to understand if gender influences the wage of the individual working in
the service industry of the USA.
Literature review
The gender pay gap is the inequality in the distribution of wage among male and female
members of the economy. Blau & Kahn (2017) stated that, historically, the productivity of
the labour has been judged based on the physical power of the workers and hence female
workers were assigned a lot let value compared to the male counterpart. Gender wage gap
creates a lot of problem for the economy that includes high poverty rates among women and
poor financial independence. Gender wage gap mainly affects the economy in the longer run.
It stalls the growth of the aggregate demand and the overall GDP of the economy in the long
term. Card, Cardoso & Kline (2015) noted that the gender wage gap is the opportunity loss
for the economy to capitalise on the growing opportunity to expand. With the advancement of
the economy and the emergence of specialisation in the labour market, impacts of gender on
the productivity has reduced, however, the wage structure has been the same making the
female worker worse off.
The gender pay gap has been one of the biggest problems of the US economy since the year
1960. The gender pay gap is the measure of how men and women are paid differently for the
same work. According to the data, the gender gap between men and women in the year 1960
has been around 57%. That means the median annual wage of women was only 58% of the
wages of the men (Bøler, Javorcik & Ulltveit-Moe, 2018). This not only directly impacted the
wages but also the work hours as well. The women had to work for more hours at that time in
order to earn the same wage as men. However, the government had taken a number of
measures to correct the inequality in the past. US government forced organisations to
publicize the data on gender wages (Boye, Halldén & Magnusson, 2017). Apart from that,
the government also allowed a special rebate for the organisations that discouraged any kind