Motor Bus Deregulation and the Gender Wage Gap: A Test of the Becker Hypothesis

This study provides a test of Becker's hypothesis that wage discrimination within an industry depends on the degree of market competition by analyzing earnings in a deregulated transportation sector--the motor bus industry. The empirical findings provide strong support for the hypothesis that motor bus deregulation, by creating an increasingly competitive environment, makes discrimination more costly and provides greater incentives for firms to employ female drivers. The earnings status of unionized white female drivers relative to white males improved significantly subsequent to deregulation, with female wages increasing even as the real wage level for male drivers declined.