Geography makes a clear difference in how much women earn in the workforce

Women now hold down the majority of jobs in the U.S. workforce. As Hanna Rosin has argued, in some ways the economic crisis may have tilted the playing field even further away from men, who have borne the brunt of blue‑collar job losses, and toward women, who are more concentrated in knowledge and service work. Still, a significant earnings gap between the genders remains, according to a host of studies, and in that respect men remain the winners by a large margin.

My new report, The Rise of Women in the Creative Class, written with my Martin Prosperity Institute colleagues Charlotta Mellander and Karen King, uses American Community Survey data to rank the best states for working women. We looked at rates of women’s workforce participation and wage and salary levels for the 50 states and the District of Columbia. In addition, we developed two new metrics to evaluate the best states for working women – a "Location Premium" and overall "Women’s Earnings Index." This week I'll summarize the key findings of that report. Today, I begin with our findings on the best states for working women.

The map above shows women’s share of the labor force across the 50 states and the District of Columbia. Women make up a majority of the labor force in five states plus the nation's capital: the District of Columbia (52.6 percent), Washington (50.2 percent), Rhode Island (50.2 percent), Mississippi (50.2 percent), Massachusetts (50.1 percent), and South Dakota (50.1 percent). At the bottom of the list is Utah, where women make up 45 percent of the labor force. Alaska and New Hampshire also have relatively low shares of women in the labor force (45.9 and 46.2 percent respectively).

We should note here that, as with any attempt to include the District of Columbia in a ranking of the states, it will tend to be an outlier since it is an entirely urban jurisdiction, unlike states that are a mix of urban, suburban and rural areas.

The next map charts average wages. Again, the District of Columbia ends up the winner here, with average women’s wages of $53,450, more than $10,000 more than its close neighbor, Maryland ($42,164), which is ranked second. Average women’s income topped $40,000 in just two other states: New Mexico ($41,452) and Connecticut ($40,716). The national average for women is $31,608. The lowest-ranked state is North Dakota, where women earn $23,349 – less than half of what they earn in the highest paying states. Women also earn less than $25,000 per year in Montana ($23,669), Idaho ($23,955), South Dakota ($23,961), Virginia ($24,489), Utah ($24,830), and Wyoming ($24,911). There are many possible explanations for this gap, including differences in occupational structures, in which more women are employed in low wage jobs or a lower share of women work full-time.

The third map charts the percentage of total wages earned by women state by state. Once more, the District of Columbia ends up topping the list, where women generate 45.3 percent of total wages. Next in line are Washington (41.3 percent), South Dakota (40.3 percent), and Maryland (40.0 percent). Utah, where women account for less than 30 percent of total earnings, takes last place again here. Women make up less than 35 percent of total earnings in Wyoming (32.0 percent) and Idaho (34.0 percent).

We then used a "location premium" measure to identify the amount of earnings that can be attributed to working in a specific state after controlling for education, hours worked, and skill.

The location premium in the District of Columbia, at $13,465, is by far the highest. A dozen states also have positive location premiums, but it only tops $5,000 in four of them: New Mexico ($7,913), Connecticut ($7,121), Maryland ($6,728), and California ($6,119). The other states with positive location premiums are Massachusetts ($4,522), Nevada ($4,121), Vermont ($2,149), New Hampshire ($1,998), Delaware ($1,834), Rhode Island ($1,710), West Virginia ($656), and Illinois ($543).

Thirty-eight states have negative location premiums. The worst of the lot are Montana (-$7,871), North Dakota (-$7,334), and South Dakota (-$7,248). Nine more states have negative location premiums of $5,000 dollars or more: Virginia (-$6,948), Mississippi (-$6,473), Wyoming (-$6,213), Nebraska (-$5,901), Arkansas (-$5,855), Oklahoma (-$5,644), Maine (-$5,405), Louisiana (-$5,259), and Idaho (-$5,234).

So what are the best states for working women overall? To get at this, we created another new metric, the "Women’s Earnings Index," which we based on four key variables: women’s share of the labor force, average wage levels for women, women’s share of total state wages, and the location premium. The fifth map charts this.

The clear winner is the District of Columbia. It's followed by Maryland (with an index score of .931), Nevada (.873), Massachusetts (.863), Rhode Island (.843), and Delaware (.838). In the bottom position we find Wyoming (which scores .103). Seven additional states have index scores below 0.3: Idaho (.123), Virginia (.142), Utah (.157) Montana (.240), North Dakota (0.270), Kansas (.275) and Oklahoma (.279).  

Clearly geography makes a difference when it comes to women’s relative economic standing. So do the kinds of jobs they are working. Tomorrow, we'll take a closer look at the place of women in the creative class.

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