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Revealing the concealed gender gap in the economic value of higher education; USA 1980-2017

The expansion of women’s educational attainments may seem a promising path towards achieving economic equality between men and women, given the consistent rise in the economic value of higher education. Using the US-CPS yearly data between 1980 and 2017, we provide an updated and comprehensive examination of the gender gap in education premiums, showing that women’s educational expansion is not as promising as it could and should be.

In response to the insufficient theoretical and methodological attention to gender inequality in the extensive empirical studies on education premiums – we develop a distinction between gender differences and gender inequality, and discuss its substantive and methodological implications for understanding trends in gender inequality in education premium. In a nut shell, gender differences in education premiums relate to the different incentives of men and women to invest in education given their earnings potential otherwise. Gender inequality, on the other hand, relates to the lower rewards that women get to their education relative to men. In relation to the former, it is well documented in the high-profile literature on education premium that women have greater incentives to invest in education, given their lower earnings otherwise. In contrast, gender inequality - i.e., women’s lower education premiums relative to men - are not acknowledged, nor is the rise of gender inequality in education premiums over time. Our findings show that women’s lower education premiums are evident across the entire wage distribution, but the gap increases among the top earners – the top quartile, and even more so, the top decile. Furthermore, this "top premium effect" increases over time with the growth in earning inequality. We discuss the meanings and implications of our findings for gender in/equality –at a time of continuous expansion of college education and continuous expansion of top earnings.