The Closing Education Gap

Last week, I focused on good news with respect to equality — the rise in women’s wages relative to men’s. That post focused on one reason for this rise: women’s increase in work experience. This week’s post will focus on another reason: the increase in women’s educational attainment. Because, while women may have always been smarter than men, for a long time they were not nearly as educated.

While work experience and women’s educational attainment may seem different, they are both forms of “Human Capital.” Human Capital is what economists call people’s investment in themselves. Like any investment, attaining Human Capital has costs. Work experience involves going to work, which can suck. Getting an education involves paying for tuition, sitting through class, and studying for exams. Judging from the expression on my student’s faces when listening to me talk about statistics, this can also suck. Sigh.

But, like any investment, Human Capital also has benefits. Work experience and education increase worker’s productivity and therefore their wages. So let’s talk about how and why women’s educational attainment has increased so much, allowing them to catch up to men.

Women’s Attainment of Bachelor’s Degrees

As I said above, the obvious benefit of more education is higher wages, while the cost is the time, mental effort, and money spent going to work or in school. Like any investment, the way to tell if attaining Human Capital is worth it is to compare the benefit and the cost. In the past, when women got married, they started working less. This fact reduced the benefit of getting an education. After all, what’s the benefit of investing in higher wages if careers are shortened by marriage?

But, married women’s increased presence in the labor force has increased the benefit to education. This increased benefit is one reason why women’s attainment of bachelor’s degrees has grown much faster than men’s. Indeed, as is shown below, today, women are more likely to have a bachelor’s degree than men.

Figure 1. Share of Women and Men Aged 25-54 Who Have Completed a Bachelor’s Degree

Note: Shows share of those 25-54 who have completed a bachelor’s degree. Data come from the Current Population Survey March Supplement.

So, one reason women’s wages are catching up to men is their increasing attainment of bachelor’s degrees. This increase is important — remember, recent changes in technology have tended to benefit those with a college degree. If women had stayed way behind men with respect to education, then they would make a whole let less than men today.

But, women’s progress towards bachelor’s degrees is only one aspect of their increased educational attainment. The other — and the more impressive — is towards graduate degrees.

Women’s Attainment of Graduate Degrees

Bachelor’s degrees have a big benefit. A person with a bachelor’s degree makes 70 percent more than person with a high school degree. Graduate degrees have a bigger benefit. Today, a person with a graduate degree makes 130 percent more than someone with a high school degree. Or, 30 percent more than someone with bachelor’s degree.

Given this fact, it is troubling that in the 1970s, women were only about a third as likely to have a graduate degree relative to men. Just 2.2 percent of women had a graduate degree relative to 6.6 percent of men. However, this inequality has vanished. The figure below shows that, like bachelor’s degrees, women today are also more likely to have a graduate degree.

Figure 2. Share of Women and Men Aged 25-54 Who Have Completed a Graduate Degree

Note: Shows share of those 25-54 who have completed a graduate degree. Data come from the Current Population Survey March Supplement.

So, what the heck changed?

The Pill and Graduate School

In a 2002 paper, Claudia Goldin and Lawrence Katz lay out one of the reasons why graduate school became more common for women. The paper is entitled “The Power of the Pill: Oral Contraceptives and Women’s Career and Marriage Decisions.” The paper highlights the role that the introduction of birth control had in increasing women’s educational attainment through reducing its cost.

So, how did the birth control pill alter the cost of pursuing an advanced degree? One way was direct. Prior to the introduction of the pill, a woman deciding to pursue a graduate degree was basically making the choice to avoid romantic relationships or to take on the risk of having graduate school interrupted by children.  This “direct” cost — giving up on dating for school — would certainly depress the number of women enrolling in such programs. 

However, the authors also point to a more “indirect” cost.  In choosing to delay having a romantic relationship, women going to graduate school would run the risk of having fewer men available later on.  Think of it this way: unless men are willing to wait for grad school to be over for sex (ha!), then women who aren’t pursuing degrees would have an advantage in marriage markets. Thus, the pill allowed women to pursue graduate degrees without the risk of seeing all the men vanish.

Conclusion

Women’s educational attainment has increased dramatically over the last four decades. Compared to men, women are now more likely to have both bachelor’s degrees and graduate degrees. One reason for this increase was that married women are more likely to work than in the past and this increases the benefit of going to school. Another thing that has changed is medical technology — the pill has reduced the cost of graduate school.

The net result of increased experience and education is higher wages relative to men. In 1975, the median woman made 60 percent what the working man did. By 2000, the ratio had risen to 80 percent.

That progress wouldn’t be too shabby. If it had continued. But, you know that it didn’t. Today, women still make 80 percent what men do. This gap is even more galling when you consider that woman are now more educated then men. More educated, yet still lower paid. Next week, we will start the process of understanding why. But for now, just know that women have more experience and education than ever — but still make less than men.

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