How Have Gender Wage Gaps Evolved Across the Life Cycle and Birth Cohorts in the United States?

This study examines how gender wage gaps have changed across the life cycle and birth cohorts in the U.S. Using 1961–2019 Current Population Survey (CPS) data, the authors analyze wage trajectories of men and women born between 1941 and 1980. They find that women’s wage growth over the life cycle has significantly increased in recent cohorts, narrowing the gender wage gap. For example, the median log wage gap at age 25 declined by over 40% from the 1941 to 1980 cohorts. However, a persistent life cycle divergence remains, with men’s wages still growing faster after age 30, especially among parents.

Full Citation and Link to Article

Goldin, C., Katz, L. F., & Olivetti, C. (Forthcoming 2025). A new perspective on the declining gender pay gap. Journal of Policy Analysis and Management. https://doi.org/10.1257/pam.20230012

Extended Summary

Central Research Question

This study investigates how gender wage inequality has evolved across different birth cohorts in the United States, with a focus on the full life cycle of earnings. Specifically, it asks: To what extent have changes in the life cycle profile of male and female wages contributed to the narrowing of the gender pay gap over time? By comparing wage trajectories of men and women from multiple generations, the authors aim to uncover the dynamics behind observed trends in wage inequality, particularly the role of early-career gains versus mid- and late-career wage growth.

Previous Literature

Research on the gender wage gap has long documented persistent disparities between men’s and women’s earnings. Earlier studies emphasized factors such as occupational segregation, differences in human capital (e.g., education and experience), discrimination, and work interruptions due to family responsibilities. Classic works by Blau and Kahn (2000, 2006) highlighted the decline in the gender gap during the 1980s and 1990s and attributed some of the progress to increased educational attainment and labor market experience among women.

More recent literature has shifted focus toward gender differences in wage growth over the career. Goldin (2014) emphasized the role of job flexibility and temporal demands in high-earning occupations, while Kuziemko et al. (2018) and Kleven et al. (2019) analyzed the “child penalty”—a sharp divergence in wages that appears after the birth of a child, especially for women. This study builds on these insights by offering a life cycle and cohort-based decomposition of the gender wage gap, filling a critical gap in understanding how within-career dynamics have evolved over time.

Data

The authors use microdata from the Current Population Survey (CPS) Annual Social and Economic Supplement, covering the years 1961 through 2019. The sample includes men and women ages 25 to 54, focusing on full-time, full-year workers to ensure comparability in labor force attachment.

The analysis is structured around 5-year birth cohorts from 1941 to 1980, creating longitudinal profiles from repeated cross-sectional data. Wages are adjusted for inflation and reported in real 2018 dollars. The authors also use demographic and labor market variables including education, marital status, number of children, and occupation or industry to assess potential explanatory factors for wage differences.

To assess parenthood’s impact, the study links fertility data to the wage records and classifies workers by parental status, examining whether wage trajectories differ systematically for mothers and fathers across cohorts.

Methods

The study employs a cohort-based, life-cycle decomposition strategy. For each birth cohort, the authors estimate average log wages by age, allowing them to trace wage growth patterns from early to mid-career. The gender wage gap is calculated as the difference in mean (and median) log wages between men and women at each age for each cohort.

Key methodological features include:

• Age-cohort panel construction: Although the CPS is cross-sectional, the authors use repeated cross-sections to reconstruct synthetic life-cycle wage profiles for each cohort.

• Decomposition of the gender wage gap: The gap is decomposed into early-career (age 25) differences and within-career (age 25–45 or 25–54) wage growth differences.

• Parenthood analysis: Wage trajectories are separately estimated for parents and non-parents to capture the contribution of family formation to the life-cycle divergence.

• Robustness checks: Estimates are tested across specifications using different sample restrictions (e.g., including part-time workers, different education levels) and adjustments for occupational sorting or selection into employment.

Findings/Size Effects

The study reveals a striking evolution in the life-cycle patterns of male and female wages over time.

1. Early-Career Gender Wage Gaps Have Narrowed Substantially

   
   

   • At age 25, the median gender wage gap declined from 0.33 log points for the 1941 cohort to 0.19 for the 1980 cohort—a reduction of about 42 percent.

   • These gains reflect improved labor market entry conditions for women, higher educational attainment, and reduced occupational segregation.

   • Female wages at age 25 have nearly converged to those of men with similar education and employment patterns.

   
   

2. Life-Cycle Divergence Persists and Remains Significant

   
   

   • Despite early-career convergence, the gender wage gap continues to widen with age for every cohort.

   • For the 1980 cohort, the gap grows from 0.19 at age 25 to 0.37 by age 45, indicating a doubling of the gap over 20 years of work experience.

   • In contrast, men’s wage growth from age 25 to 45 remains robust across cohorts, while women’s growth is slower and flatter.

   
   

3. Parenthood Is a Major Driver of Mid-Career Divergence

   
   

   • Among parents, the gender gap is much larger and grows faster over time.

   • Mothers in the 1980 cohort experience almost no wage growth after age 30, while fathers’ wages rise sharply.

   • Among non-parents, the gender wage gap is both smaller and more stable over the life cycle, indicating that family responsibilities are a central factor behind the divergence.

   
   

4. Progress Has Plateaued for Mid-Career Women

   
   

   • While early-career wage parity has improved, the gap in wage growth from age 25 to 45 has barely changed across cohorts.

   • Women born in 1980 exhibit similar within-career wage growth patterns as those born in 1965, suggesting limited progress in closing the mid-career gender gap in recent decades.

   
   

5. Occupational Sorting and Part-Time Work Explain Some, But Not All, of the Gap

   
   

   • Adjusting for differences in industry, occupation, and part-time work reduces the life-cycle gap, but does not eliminate it.

   • The persistence of the gap after adjustments suggests that unobserved factors, such as job flexibility or discrimination, continue to play a role.

   
   

6. Implications for Lifetime Earnings and Inequality

   
   

   • Given that mid-career wage growth drives a large portion of lifetime earnings, the plateau in women’s wage trajectories after age 30 implies significant cumulative losses over the life span.

   • These disparities contribute to long-run wealth and retirement gaps between men and women.

   
   

Conclusion

This study provides a comprehensive analysis of how gender wage gaps have evolved across the life cycle and birth cohorts. While substantial progress has been made in narrowing early-career disparities—especially in wage levels at labor market entry—the findings reveal persistent and significant gender inequality in wage growth during mid-career years.

The evidence suggests that while policy and social changes have successfully supported women’s entry into the labor force, they have been less effective at addressing the constraints that limit women’s wage growth after age 30. In particular, the wage penalty associated with motherhood remains a powerful and enduring barrier to gender wage equality.

The authors argue that future progress in closing the gender pay gap must focus not only on access to employment and early-career outcomes but also on addressing the institutional and social structures that contribute to the divergence during the life cycle. This includes promoting workplace flexibility, shared caregiving responsibilities, and stronger protections against discrimination and career penalties for family leave.

Ultimately, the study underscores that a full understanding of gender inequality in the labor market requires a life-cycle perspective. Only by analyzing how wage patterns evolve over time can we fully grasp the challenges women face and develop effective policy solutions to achieve enduring gender equity in earnings.