Decomposing women’s low-wage employment in the United States

Marlene A. Lee, Population Reference Bureau (PRB)

For the nation as a whole, race differences with respect to low-wage employment among women are relatively small. However, in rural America, race and ethnicity are significant factors in women's low-wage employment. Black and Hispanic women are much more likely than white women to be employed in low-wage work in rural areas. This is not surprising given that low-wage employment is strongly associated with the industrial job mix available to workers, local differences in prevailing wages, and educational disparities. The concentration of rural blacks in the low-wage South and the development of a low-wage economy among immigrants in the West undoubtedly contribute to black/white and Hispanic/non-Hispanic differences in women's rate of low-wage employment. But differences in other factors associated with low-paid work, e.g. single motherhood, part-time work, and education may also contribute to racial and ethnic differences in the concentration of low-wage employment. Using the American Community Survey with and decomposition methods, this paper identifies the relative contribution of differences in education, prevalence of single parent families, hours of work, industrial sector, occupation, and citizenship. Understanding the relative effects of education, single parenthood, and hours of work are particularly relevant to the potential effects of legislation governing income cash assistance since welfare reform in 1996. Findings show that in non-metropolitan areas, black and Hispanic women are considerably more likely than white women to be employed in low-wage work. For the black/white gap, education plays the major role. Findings with respect to the Hispanic/non-Hispanic gap are ambiguous and limited by the factors one can measure with the American Community Survey.