Study Finds Gender Pay Gap Gains From Historic Laws

New research reveals landmark legislation—the 1963 Equal Pay Act and the 1964 Civil Rights Act—had a greater impact on reducing the gender pay gap than originally thought. 

When comparing annual full-time, full-year earnings for working men and women at the median—the Census Bureau’s standard metric—the gender pay ratio remains largely flat until the early 1980s. That stagnancy led to a common critique that the historic laws were ineffective in reducing sex discrimination in the workplace. But that’s an incomplete picture, says Carlson School Assistant Professor Thomas Helgerman.

Using a modern causal inference framework, the Work & Organizations professor and his co-authors conducted a more detailed evaluation of the policies’ impacts. Most notably, the researchers found the laws led to sharp wage gains among low-earning women workers. They determined weekly wages grew by about 10 percent in jobs with the average gender gap, largely benefiting women in the lower half of the weekly wage distribution. 

Helgerman says the growth among low-earners reflects the compliance checks at the time for the Fair Labor Standards Act, which imposes the minimum wage. 

“After the legislation passed, the Department of Labor asked all of their field officers, ‘Now can you check for compliance with the Equal Pay Act as well?’” says Helgerman. “Because people earning the minimum wage are going to be at the lower end of the wage distribution, that is exactly where you’d expect the policy impact to show up because that’s exactly where officials were checking to make sure that firms were complying.”

However, the Equal Pay Act and the Civil Rights Act remain imperfect. Despite these newfound gains, the researchers believe discriminatory practices, such as reclassifying women’s jobs to lower-paying positions, persisted after the laws took effect. 

“Employment policy without sufficient protections can lead to shifts in discriminatory tactics,” says Helgerman. “But overall, our finding confirms that federal policy mattered a lot more than we thought that it did.”