New Research: Gender Wage Gap for Women of ColorThe Return on Invest of UHSE Awards

Karen Tao, Senior Researcher
September 5, 2024

Women sitting around a table having a business meeting.
Photo by Christina @ wocintechchat.com on Unsplash

The gender wage gap has significant economic implications. When talented and skilled women are not fully compensated for their contributions, it represents a loss to human capital. Long-term consequences of the wage gap may include diminished lifetime earnings, wealth accumulation, and retirement savings (James & Agunsoye, 2023). Understanding these economic ramifications is crucial for policymakers, employers, and other stakeholders in developing strategies to mitigate the wage gap's adverse effects and fostering more equitable economic outcomes. The current study serves as a follow-up for a previous UDRC study that investigated the gender wage gap faced by Utah women of all races by focusing on the experiences of women of color.

In this study, men’s and women’s yearly earnings are compared by showing women’s income as a percentage of men’s. To do this, women’s median income is divided by men’s median income. The wage gap is found by subtracting this percentage from 100%. For example, a 20% wage gap means women earn 80 cents for every dollar men earn.

Enrollment and graduation data 2011 – 2020 from the Utah System of Higher Education (USHE) were linked to Department of Workforce Services (DWS) wages records to calculate the wage gaps. This study includes Utahns who had some college, earned a less-than-one-year certificate, a two-year certificate, an associate degree, a bachelor’s degree, and a graduate degree. Wages after the graduation of the highest educational attainment are compared. Students who returned to school after their highest education attainment are excluded as they may be unavailable for workforce participation due to education. Furthermore, workforce participation is grouped into strongly attached to the workforce (earning at least the minimum wage with 40 hours a week and 52 weeks a year) and those who worked.

In general, the gender wage gap grows over time for women of color (Figure 1). Native American women who worked experienced the highest wage gap overall, from 50.4% one year after leaving postsecondary education to 63.3% ten years later. Asian women who worked experienced the lowest wage gap, from 16.5% one year after leaving postsecondary education to 26.5% ten years later. For all groups of WOC, the wage gaps for most years were found to be statistically significant where sample sizes were sufficient.


Figure 1: The gap between the wages of WOC and white men

As the educational attainment of women of color increases, the wage gap generally decreases. WOC who leave postsecondary education at a younger age face a larger wage gap than those who leave postsecondary education at an older age. Healthcare programs are the most popular among WOC, but most WOC who studied healthcare-related programs experienced an increase in the wage gap over time compared to white men who studied healthcare programs.

In most cases, the portion of the wage gap that cannot be explained by available human capital measures grows over time (Figure 2). Using the Blinder-Oaxaca decomposition, human capital measures are modeled with individuals' ages, prior work experience, and highest levels of educational attainment. The unexplained portion of the wage gap is consequent to wage differences not accounted for by these independent variables. Among all workers, women of two or more races experienced the highest unexplained portion of the wage gap, at 90.4% ten years after leaving postsecondary education.


Figure 2: The unexplained portion of the gender wage gap

Finally, the financial impact of the COVID-19 outbreak has disproportionally affected women of color in terms of wage and job loss. Most WOC experienced lower YOY wage growth than white men in the seven quarters following the COVID-19 outbreak, and all groups of WOC had a higher rate of job loss compared to men of the same race.

For a deeper dive into the results, an interactive data narrative is available. For more details on the data, methodologies, and results, please see the full report.


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