This work addresses gender earnings inequality in the U.S. labor market using Census 2000 and other data from various sources. It focuses on two overlooked social mechanisms that generate and shape occupational rewards in gender specific manners: social closure and social/welfare policies of state governments.

Previous studies on gender inequality in earnings have found that occupational sex composition, either as an indicator of devaluation or as a measure of segregation effects, affects occupational rewards and exacerbates gender gaps in earnings. However, analysis of the latest census data shows that the late 1990s saw little evidence of gender inequality that resulted from differences in sex composition across detailed census occupations.

I then propose that social closure mechanisms, which restrict access to valuable economic resources or assets, work at the occupation level, yielding earnings returns to closure. Three dimensions of occupational closure were investigated: educational credentialing, access to occupation specific skills training, unionization. Educational credentialing helps female employees to catch up with their male colleagues within a given occupation because it allows female employees to benefit from occupational closure, which is labeled as the "rent sharing" mechanism. Unionization also benefits female employees by compressing the wage structure of occupations through which female employees approach the level of males' earnings, compared with elsewhere. This effect, however to some extent, is mediated by their employment in the public sector. The skills training dimension of occupational closure shapes earnings outcomes in a gender-neutral manner, which contradicts previous findings based on job level data.

Welfare and social policy interventions of state governments have significant effects on shaping gender disparities in earnings. As a conduit of liberal institutional environments, state policy intervention reduces gender gaps in earnings while it exacerbates gender inequality in earnings by channeling female employees into low paying, social service sector occupations. Therefore, state governments as welfare provider and employer, provide female-typed occupations that underpay their employees and carry limited chances of promotion. In addition to their main effects, state policy interventions do interact with social closure mechanisms, which modify the main effects of social closure practices.