During the 1980s, the wage gap between white women and white men in the US declined by approximately 1 percentage point per year. In the decades since, the rate of gender wage convergence has stalled to less than one-third of its previous value. An outstanding puzzle in economics is ``why did gender wage convergence in the US stall?'' Using an event study design that exploits the timing of state and federal family-leave policies, we show that the introduction of the policies can explain 94% of the reduction in the rate of gender wage convergence that is unaccounted for after controlling for changes in observable characteristics of workers. If gender wage convergence had continued at the pre-family leave rate, wage parity between white women and white men would have been achieved as early as 2017.
First version, January 11, 2023
J16: Economics of Gender; Non-labor Discrimination
J31: Wage Level and Structure; Wage Differentials
J32: Nonwage Labor Costs and Benefits, Retirement Plans, Private Pensions