The Glass Ceiling and the Paper Floor: Changing Gender Composition of Top Earners since the 1980s

Abstract

Since the late 1970s, the US earnings distribution has experienced profound changes. Among these changes, two of the most well-known are the increasing share of total earnings that accrues to top earners (i.e., individuals in the top 1% or top 0.1% of the earnings distribution) and the continued relative absence of women from this top-earning group. This latter phenomenon is commonly referred to as the glass ceiling, the emergence of which has spurred both debate over the appropriate policy response as well as active research into its primary causes. However, progress on both fronts has been hampered by the scarcity of empirical evidence from nationally representative data on the gender structure at the top of the earnings distribution. Our goal in this paper is to provide this necessary empirical evidence on the glass ceiling, using newer and better data than have been previously available. In doing so, we also revisit several important questions about top earners of both genders: the dynamics of their earnings, their industry composition, their age and cohort composition, and the evolution of earnings for lifetime top earners. Our interest in top earners is motivated by their disproportionately large influence on the aggregate economy. This influence operates through at least three channels. First, top earners are crucial economic actors. In the United States, individuals in the top 1% of the income distribution earn approximately 15% of aggregate before-tax income and pay about 40% of individual income taxes—more than one and a half times the amount paid by the bottom 90 percentiles—and 50% of all corporate income tax. Because this group includes virtually all high-level managers