This report discusses ways to determine why female Federal employees earn less than male Federal employees. Two general approaches are discussed: economic analysis and job content. Economic analysis attempts to measure and explain existing wage differentials between men and women using characteristics of individuals, occupations, and the workplace. Such an analysis could indicate the extent to which factors such as education, work experience, and occupation account for wage differences by sex in the Federal Government. The job content approach focuses on the characteristics of jobs in seeking to identify wage disparities. A job content study could provide a measure of the value of various Federal jobs to the government and a corresponding comparison of the present grades or salaries for those jobs. The General Accounting Office (GAO) believes that each approach has merit. Accordingly, in GAO's view, the most comprehensive and effective means through which to conduct a pay equity study at the Federal level would be to include both approaches. (Appendixes to the report include summaries of pay equity studies conducted in various states, legal issues, pay issues in the Federal service systems, and a list of organizations/individuals contacted and participants on panels for the formulation of this report.) (Author/KC)