Oral Contraception Linked to Women’s Wage Gains

In The Opt-In Revolution? Contraception and the Gender Gap in Wages, by Bailey et al., published in the National Bureau of Economic Research, reports that from 1979 to 1989, median wage and salary earnings of full-time, working women increased from approximately 60% of men’s earnings to 69% of men’s earnings.  This marked a striking departure from the stability of women’s relative pay during the 1970s, narrowing the wage gap during the 1980s.  Authors utilized data from the National Longitudinal Survey of Young Women, which includes interviews starting in 1968 with 5,159 women ages 14 through 24, with 21 follow-up interviews.

Authors examined state-level variation within birth cohorts for early legal access (ELA) to the pill, and although the timing of ELA implementation differed significantly from state to state, every state gave physicians the ability to prescribe the pill to unmarried women younger than age 21 without parental consent.  The researchers used respondents’ legal state of residence at age 21 to determine whether they would have had ELA.  Authors then utilized the 1970 National Fertility Survey, which includes data on ever-married women’s pill use during the 1960s, in order to specifically look at pill use among women who were married by 1970 and those who were ages 18 through 21 before 1970.

Researchers determined that although the hourly and annual wages of women who had ELA were lower in their early 20s than the earnings of women who did not have ELA, “their wage and salary earnings grew more rapidly than their counterparts as they aged.”  Specifically, the researchers found that women ages 20 through 24 with ELA earned 3% less hourly and 9% less annually, compared with their peers.

The researchers suggest that the earnings of working women with ELA rose more rapidly as they aged because of their increased investment in their human capital and greater labor-market attachment.  However, they wrote that the decreased early wages remains “an open question.”  They suggested that ELA might have shifted women with high levels of ability toward pursuing an education and out of the labor force.  Thus, as these women entered the workforce in their late 20s, “their greater skills would lead their earning profiles to be steeper than those of less skilled women.”

Findings further showed that the dissemination of the pill to “younger, unmarried women improved their ability to time births, altered their expectations about future childbearing, and reduced the cost of altering career investments to reflect their changed expectations.”  The researchers determined that pill “provided younger women the expectation of greater control over childbearing,” motivating and enabling them to invest “more in their human capital and careers.”

Altogether, the pill’s effect on wages accounted for roughly one-third of the total wage gains for women who were born in the mid-1940s to early 1950s.

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