Metropolitan Earnings Inequality and Service Sector Employment

Data for the 130 largest metropolitan areas in the United States indicate that ser-vice sector employment increases inequality. The structure of inequality differs for men and women. For men, services increase inequality through disparities created by high earners whereas for women services increase inequality through disparities between median and low earners. These disparities in turn reflect the sectors in the service economy where men and women work and the kinds of jobs they hold. High inequality among the men is found in metropolitan areas specializing in pro-ducer and business related services with high proportions of professional and managerial personnel. For women, inequality is related to retail trade and social services which require high proportions of unskilled, service related occupations. The data consequently suggest how the heterogeneous service sector provides a setting in which traditional linkages between gender and occupation influence in-equality in earnings. No support is found for the position advanced by various vostindustrial theorists that services decrease inequality. Economic specialization has long been identified as an important determi-nant of a community's earnings and earnings distribution (Betz 1972