Female-typical Subjects and their Effect on Wage Inequalities among Higher Education Graduates in Germany

Abstract

In the search for an explanation of wage inequalities between men and women, it is often argued that women's disadvantages on the labour market are the result of their lower investment in human capital. However, this argument loses for at a time when highly educated women are outperforming men in terms of educational attainment. But even within the group of higher education graduates, gender differences remain in the form of gender-typical enrolment in academic subjects. The present article analyses the wage effects of how graduation in typically female subjects and subsequent work in typically female occupations generate wage inequalities 1 and 5 years after graduation. For understanding these effects, it follows the hypothesis of a socio-cultural devaluation of female-dominated subjects and occupations. Based on the 1997 HIS Absolventenpanel, we estimate gross hourly wages of male and female higher education graduates as they enter the German labour market. Results show that, 1 year after graduation, men receive a higher wage penalty than women for graduating in a female-dominated subject. However, working in typically female occupations affects women's wages more strongly than it does men's immediately after graduation. In addition, women have fewer possibilities to compensate for this penalty in subsequent years.