By Martha J. Bailey, Bryan A. Stuart, and Thomas Helgerman
In the US, the story of women’s economic progress has been one of changing aspirations and career investments. As women leaned in and their labor-market skills increased, the gender gap in pay narrowed rapidly in the 1980s—progress that has continued through the present.
Few histories would claim a role for anti-discrimination legislation, because the gender gap in pay remained stubbornly unmoved for 15 years after it passed (see Figure 1). Neither the Equal Pay Act of 1963, the first piece of federal legislation to mandate equal pay for equal work, nor Title VII of the 1964 Civil Rights Act, which banned sex-based discrimination in hiring, firing, and promotion, registers as a blip in the timeseries.
In 1990, Victor Fuchs summed up the professional consensus saying, “It is easy enough to find particular instances where these laws opened up jobs that were previously closed to women or resulted in a realignment of women’s pay scales, but it is difficult to see any major effects on broad trends in women’s wages or employment” (p. 27). Claudia Goldin explained why: “Equal pay for equal work has been … a rather weak doctrine to combat discrimination, because women and men worked in such different jobs.” She adds, “Title VII of the 1964 Civil Rights Act has also been weak in counteracting pay inequities that arise from differences in jobs and promotion” (1990, p. 209).
Our research revisits these conclusions using two new quasi-experimental approaches, which exploit variation in the incidence of the legislation across places and jobs, to look beneath the persistence of the national gender gap. The first exploits variation in state-level equal pay laws passed before 1963. If state equal pay laws were somewhat effective in reducing discrimination before the 1960s (Neumark and Stock 2006), we expect that the 28 states without equal pay laws in 1963 to exhibit larger changes in women’s wages and employment after federal anti-discrimination legislation took effect. The data in Figure 2 show exactly this: federal anti-discrimination legislation raised women’s wages more in states without pre-existing equal pay legislation—but only after 1964. The magnitude of change registered around 7 percentage points within one year.
The second approach exploits variation in the gender pay gap within job cells, defined by single-digit industries, occupations, and state group in 1960. If the gender gap in pay in 1960 is correlated with the level of sex discrimination within a job and federal legislation reduced this discrimination, women’s labor market outcomes improve more in job cells with larger wage gaps—but only after the legislation passed. Again, the data support this hypothesis (see Figure 2). Women’s wages grew more quickly after 1964 in occupations and industries (“jobs”) where the 1960 gender pay gaps were larger. The magnitude of the within-job effects was smaller at around 10 points at the mean within 4 years. Neither approach shows an effect on men’s wages, which helps rule out mechanisms other than the legislation, such as increasing demand for workers in certain states or jobs. In short, the results indicate that the Equal Pay Act and Title VII led to widespread, large increases in women’s wages.
So why don’t these gains show up in the gender gap? Much of the skepticism about the effectiveness of federal anti-discrimination stems from the fact that – when measured at the median as is the practice of the Census Bureau – women’s wages evolved similarly to men’s wages throughout the 1960s and 1970s (shown in Figure 1). A key factor in reconciling Figure 1 with our findings is that the legislation affected only the lower part of the wage distribution. After the legislation took effect, women’s wages at the 10th percentile surged by 40 percent and at the 25th percentile by 10 percent, while there was little effect at the median of the wage distribution and above. These findings are consistent with the enforcement of “equal pay for equal work” being easier in jobs where wages were lower and tasks were more routine. Gains at lower wage levels also reflect the enforcement focus of the Wages and Hours Division, which was tasked with enforcing compliance with the minimum wage as well as the Equal Pay Act.
A closely related question is whether employers were less likely to hire women after the equal pay legislation came into effect. While Title VII of the Civil Rights Act prohibited discrimination against women, its enforcement was limited in the 1960s. Employers could easily change their job assignments and production processes in ways which did not run afoul of courts. By and large, we do not find statistically significant evidence that women’s employment was adversely affected by the anti-discrimination legislation.
Donohue and Heckman (1991) argued that federal anti-discrimination provided cover for employers to raise the wages and increase the employment of Black workers, often against the wishes of other employees. Yet the historical record provides little evidence that employers felt this way about women. In the early 1960s, sex discrimination in labor markets was not only widely accepted, but also institutionalized and lawful. State laws mandated different minimum wages, break, and rest requirements for men and women and placed different restrictions on the jobs they could hold (Moran 1970; Marchingiglio and Poyker 2021). Union contracts delineated different pay for the same job by sex.[1] Firms fired women when they married.[2] Newspapers posted help wanted advertisements separately by sex (Pedriana and Abraham 2006), along with different pay scales for women and men.
When “sex” was added to the list of Title VII’s protected classes just one day before the final vote, Civil Rights opponent and segregationist, Representative Howard Smith (D-Virginia), played his amendment for laughs (Thomas 2016). He claimed that a letter from his constituent had asked him to “protect our spinster friends.” As laughter broke out in the chamber, the floor manager of the House chimed in, “I can say as a result of forty-nine years of experience…that women, indeed, are not the minority in my house…I usually have the last two words, and those words are, ‘Yes, dear’.” One of the twelve women representatives in the House, Martha Griffiths (D-Michigan), silenced the guffaws, “if there had been any necessity to point out that women were a second-class sex, the laughter would have proved it” (p. 102).
What broader lessons does this episode offer? Even in the context of blatant and widespread discrimination against women workers, federal anti-discrimination legislation led to durable gains in women’s wages. Although gains in wages were not universal and the legislation did not eliminate the entirety of the gender gap, this episode underscores how policy can have large effects on long-standing practice.
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[1] Eaton, William J. 1965. “Women Earning Equality.” The Washington Post, June 17, E1.
[2] Goldin, Claudia 1991. “Marriage Bars: Discrimination Against Married Women Workers from the 1920’s to the 1950’s.” In Favorites of Fortune: Technology, Growth, and Economic Development Since the Industrial Revolution, edited by Henry Rosovsky, David Landes and Patrice Higgonet. Cambridge, MA: Harvard University Press.
