Swimming upstream: Trends in the gender wage differential in the 1980s

Using Michigan Panel Study of Income Dynamics data for 1979 and 1988, we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low-wage workers. The decrease is traced to ''gender-specific'' factors which more than counterbalanced changes in measured and unmeasured prices working against women. Supply shifts net of demand were unfavorable for women generally and hurt high-skilled more than middle- and low-skilled women. By analyzing wages, we find support for the notion of a gender twist in supply and demand having its largest negative effect on high-skilled women.