Institutions, education, and the gender wage gap across US states

Abstract

This study examines how gender earnings ratios (GERs) vary across US states from 2010 to 2020, focusing on the role of labour market institutions while accounting for differences in educational attainment. We estimate state-level GERs using Mincer-type earnings regressions and examine their relationship with labour market institutions. We develop a composite institutions index that combines measures of minimum wage policy, union density, the Kaitz index, and right-to-work status to capture broader differences in state labour market institutions. Our analysis reveals substantial cross-state variation in GERs, with the largest disparities observed among workers with lower levels of educational attainment. Although gender earnings disparities narrow with education, considerable differences remain even among university-educated workers. States maintaining the federal minimum wage or operating under right-to-work statutes are disproportionately represented among those with lower GERs. These findings suggest that educational attainment alone is insufficient to eliminate gender earnings disparities and highlight the importance of labour market institutions in understanding variation in gender earnings outcomes across states.