Alas, a Blog

(This is one of a series of posts on the wage gap.)

So suppose you want to look at the wage gap. The best thing to do is to consider only what happens to young workers without children, right?

This myth, based on an unpublished study by economist June O’Neill, has mainly been propagated by two members of the right-wing Independent Women’s Forum, Diana Furchtgott-Roth and Christine Stolba. A typical example, from an ILF webpage, says: “The ‘wage gap’ frequently mentioned in the press is the result of a crude comparison. This ‘gap’ refers to the average wages of men and women, without regard to important factors such as age, education, occupation, or experience. When those key variables are considered, women earn essentially as much as men. Data from the National Longitudinal Survey of Youth, which does consider these key variables, reveal that among people ages 27 – 33 who have never had a child, women’s earnings are close to 98 percent of men’s.”

(By the way, counting both age and experience, as these folks advocate, is double-counting; age should not effect how much people are paid, except as a proxy for experience).

What other studies say

In fact, it’s not true that studies that account for age, education, occupation and experience – what economists call “human capital” favors – find no wage gap. Blau and Kahn accounted for all these factors and more, but a pay gap still remained. Wood and colleagues’ study of lawyers accounted for all of those factors and more, but again the pay gap wasn’t eliminated. Other scholars who have accounted for human capital differences but still found a substantial pay gap include Bellas, Wellington, Hampton & Heywood, Weinberger, England, Reid & Kilbourne, and Duncan (complete citations to all of these studies can be found at the bottom of this post).

What they miss by ignoring women over age 33

One important difference is in Furchtgott-Roth/Stolba’s unexplained decision to limit their study only to people ages 27-33. As the National Committee on Pay Equity asked, “where does that leave working women who are younger than 27 or older than 33?” It leaves them completely unexamined by the Furchtgott-Roth/Stolba study – which is very convenient, for right-wingers who want to minimize the pay gap.

This method of looking only at young women’s wages is hopelessly flawed. Discrimination in the workforce usually is a matter of “cumulative causation.” Among other things, this means that the effects of discrimination add up over a lifetime. So, for example, losing a single job offer or promotion usually won’t make a big difference; but dozens of such small losses over the course of women’s careers eventually add up to a big wage gap.

This is important, because it means we should expect the pay gap between men and women at the start of their careers to be small. The effects of discrimination build up gradually over time, and only becomes sizable once women have been in the job market long enough for the impacts of dozens of individual instances of discrimination to add up. So when Furchtgott-Roth and Stolba look only at the pay gap among young workers, they’ve selected workers who have not yet been in the workforce long enough to have experienced the worse of the pay gap.

For an example of what I mean, consider the U.S. government’s wage gap figures. Usually we see these presented for everyone in the labor force over the age of 16, but the numbers are also available broken down by age. What we find is that the wage gap gets larger as women get older – just as the theory of cumulative discrimination would predict. When we look only at workers age 16 to 24, the wage gap is 93% (that is, women are paid 93% of what men are paid, on average). But when we look at workers ages 45 to 54, the wage gap is 70%.

In short, Furchtgott-Roth and Stolba haven’t really shown that the wage gap doesn’t exist. All they’ve shown is that the wage gap is at its smallest among young workers – something that feminist economists have known for decades.

References: Blau, Francine and Lawrence Kahn (1997). “Swimming Upstream: Trends in the Gender Wage Differential in the 1980s.” Journal of Labor Economics, volume 15 (1), part 1, January 1997, pages 1-42.

Wood, Robert, Mary Corcoran and Paul Courant (1993). “Pay Differences Among the Highly Paid: the male-female earnings gap in lawyers’ salaries.” Journal of Labor Economics, volume 11 (3), pages 417-441.

Bellas, Marcia (1994). “Comparable Worth in Academia: The effects on faculty salaries of the sex composition and labor-market conditions of academic disciplines.” American Sociological Review, volume 59, December 1994, pages 807-823.

Wellington, Alison (1994). “Accounting for the Male/Female Wage Gap Among Whites: 1976 and 1985.” American Sociological Review volume 59, December 1994, pages 839-848.

Hampton, Mary and John Haywood (1993). “Do Workers Accurately Perceive Gender Wage Discrimination?” Industrial and Labor Relations Review, volume 47 (1), October 1993, pages 36-49

Weinberger, Catherine (1998). “Race and Gender Wage Gaps in the Market for Recent College Graduates.” Industrial Relations, volume 37 (1), January 1998, pages 67-84.

England, Paula, Lori Reid, and Barbara Kilbourne (1996). “The Effect of the Sex Composition of Jobs on Starting Wages in an Organization: Findings from the NLSY.” Demography, volume 33 (4), November 1996, pages 511-521.

Duncan, Kevin (1996). “Gender Differences in the Effect of Education on the Slope of Experience-Earnings Profiles.” American Journal of Economics and Sociology, volume 55 (4), October 1996, pages 457-471.

UPDATE May 2005: Here are some more relevant studies. I haven’t read every one of these yet; I’m putting them here on my blog because my blog is the only place I can write down stuff like this and not lose it!

Title: Access to Supervisory Jobs and the Gender Wage Gap among Professionals.

Source: Journal of Economic Issues, Dec2003, Vol. 37 Issue 4, p1023, 22p

Abstract: The article presents a study that analyzed the allocation of men and women across supervisory positions as well as the wages earned by male and female supervisors in professional jobs, using controls for background, personal and human capital, and job characteristics. The placement of professional men and women across different firms and establishments may contribute to differential access to supervisory positions and the gender wage gap. Human capital variables, such as education, test scores, job experience, and tenure are expected to have significant impact both in the allocation process and in wage determination of men and women across supervisory positions in professional jobs. On the demand side, job attributes such as firm size, to some extent, reflect the impact of employers and company policies both in the allocation process and in wage determination. The results of this study show that professional women encounter significant barriers in gaining access to meaningful supervisory jobs and in achieving pay equity with their male counterparts. Across all supervisory jobs, women earn only a 6 percent wage premium, while for men the wage premium is about 15 percent. However, among professionals who hold relatively more meaningful supervisory positions, women earn substantially higher wages and the gender wage gap, although significant, is reduced considerably. Clearly, the nature and hierarchy of supervisory positions are important determinants in improving the status of women professionals and reducing the significant gender wage gap in the labor market.

* * *

Journal of Socio-Economics Volume 32, Issue 3 , July 2003, Pages 317-330

Establishment size, employment, and the gender wage gap

Aparna Mitra

Abstract: This study analyzes the allocation of professional males and females in large establishments, and the effects of employment in large establishments on the wages of men and women. The results of this study show that professional women are disproportionately employed in large establishments. Although professional women earn higher wages in large establishments, the gender wage gap is significant in large establishments despite using detailed controls for worker and human capital characteristics. One factor contributing to the significant gender wage gap may be the unequal access and returns to supervisory jobs for women in large establishments.

* * *

Recent two-stage sample selection procedures with an application to the gender wage gap. Louis N. Christofides, Qi Li, Zhenjuan Liu, Insik Min.
Journal of Business & Economic Statistics July 2003 v21 i3 p396(10)

The LMAS data make it possible to consider dummy variables
indicating whether the individual was born outside
Canada (immigrant D 1); whether he or she is disabled and
limited at work (disabled D 1); his or her age (25″“34 is the
omitted category); region of residence [three dummy variables
for the Atlantic region, Quebec, and Prairies/British Columbia
(Ontario is the omitted category)]; and three educational attainment
dummy variables indicating whether the individual has
less education than a high-school diploma (individuals with a
high school diploma is the omitted category), has a postsecondary
diploma, or has a university degree. These variables are
included in both estimation stages. In addition, the ÂŽ rst-stage
equations include dummy variables indicating whether the individual
is married, is the family head, and has his or her own
children under age 18. In the wage equation, y2 is the logarithm
of the hourly wage rate and x2 includes, in addition to the
aforementioned common variables, the individual’s job tenure,
whether he or she is covered by collective bargaining, whether
the job has a pension plan, and three dummy variables referring
to the employing ÂŽ rm’s size. […]
…only 10:27% of the differential in the mean log-wages can
be explained by superior productivity characteristics for males.
In the Heckman (1979) approach this percentage is 12:44%, in
the Wooldridge (1994) approach it is 10:78%, and in the semiparametric
approach (Li”“Wooldridge) it is 9:10%.

The gender gap in earnings at career entry
Margaret Mooney Marini, Pi-Ling Fan. American Sociological Review. Aug 1997.Vol.62, Iss. 4; pg. 588-604

We propose a new approach to analyzing gender differences in wages. This approach identifies several alternative explanatory mechanisms to account for the sorting of women and men into different types of jobs that offer different levels of reward. Because labor market rewards derive from labor market positions, we study matching processes operating at the micro level that sort workers into existing slots in a given macro-level structure of jobs and associated wages. We focus on the explanation of gender differences in wages at career entry. Analyzing data from the National Longitudinal Survey of Youth collected between 1979 and 1991, we find that at career entry women earn 84 cents for every dollar men earn. Gender differences in worker characteristics account for only about 30 percent of this wage gap: Gender differences in occupational aspirations have the most important effect, accounting for 16 percent of the wage gap, and gender differences in job-related skills and credentials account for about 14 percent of the wage gap. Gender differences in adult family roles have little direct effect. Our analysis further suggests that the external influences of employing organizations and network processes on gender differences in occupational and industrial placement at career entry account for another 42 percent of the wage gap.

(This is one of a series of posts on the wage gap.)

This is a very common argument. In this view, the pay gap is only still around because women only recently entered the workforce; as such, women haven’t had as much time to work their way up the employment ladder to the well-paid positions. There’s no need to “do” anything about the pay gap; if we just wait, it’ll go away by itself.

What I always want to know is, exactly how long must we wait until we can admit that this argument no longer makes sense? The Equal Pay Act of 1963 was forty years ago, for goodness sake! A woman who had been in the workforce five years when the Equal Pay Act was passed might well be retired by now, and the pay gap still hasn’t gone away.

Work experience doesn’t account for the pay gap.

The fact is, workplace experience makes a very large difference – but it doesn’t make all the difference. The economists Francine Blau and Lawrence Kahn (Journal of Labor Economics, January 1997) calculated the impact of a number of factors on the wage gap. The largest factor (other than “unexplained”) was labor force experience; the average female worker has 12.79 years of full-time experience, while the average male worker has 17.41. This difference accounted for between 26% and 30% of the total wage gap – meaning that even though work experience is the biggest factor in the pay gap, it still leaves most of the pay gap unaccounted for.

Another approach was taken by the economists Robert Wood, Mary Corcoran and Paul Courant (Journal of Labor Economics, 1993). They examined one profession (lawyering) in great detail, following the careers of female and male graduates of the University of Michigan Law School. Fifteen years after graduation, the women in their sample were earning 61% of what men earned. A lot of that difference is because many women had taken time off from work, or worked fewer hours, in order to raise children. But even when work experience and hours were accounted for, women still earned only 82% of what men earned. Again, even after you account for experience, there’s still a large pay gap between men and women.

Why assume that workplace experience isn’t affected by sexism and discrimination?

When anti-feminists say that workplace experience shows that discrimination doesn’t exist, they’re sneaking an unjustified assumption into the argument. Because part of the pay gap can be accounted for by experience, that part of the wage gap doesn’t, they say, have anything to do with discrimination. But is it logical to believe that discrimination wouldn’t have any effect on work experience?

As the economist Francine Blau and her colleagues point out, these arguments “neglect the feedback effects of labor market discrimination on the behavior and choices of women themselves. For example, women have traditionally received lower returns to labor market experience than men. The lesser amount of work experience which they have accumulated may be due in part to their response to these lower returns.” (On page 192 of Blau, Francine, Marianne Ferber, and Anne Winkler’s1998 book. The Economics of Men, Women and Work, third edition.)

In other words, there’s a vicious cycle at work here. If women are discriminated against at work, so they get less pay for what they do, that means women will be less motivated than men to work, and will therefore wind up with less work experience. So while the pay gap is partly caused by women’s lesser work experience, at the same time the pay gap partly causes women’s lesser work experience.

(This is one of a series of posts on the wage gap.)

Myth: The pay gap only exists because women take time off from work to raise kids.

This is a common belief, especially among anti-feminists. Typical is Patricia Hausman’s article on The National Review’s website, which claimed that “it is not being a woman, but being a mother, that causes noteworthy differences in earnings.” In Ms. Hausman’s view, sexism doesn’t harm women; instead, “females make trade-offs between high wages and other rewards in life.”

Motherhood doesn’t account for all of the pay gap.

Hausman is simply wrong to say that motherhood accounts for all “noteworthy differences in earnings.” Motherhood makes a difference, of course; many mothers spend a few years (and sometimes longer) out of the workforce. When a mother returns to the workforce, she of course has less work experience than her male co-workers, and understandably gets paid less.

But how much difference does that make, exactly? The economists Francine Blau and Lawrence Kahn calculated the impact of a number of factors on the wage gap (Journal of Labor Economics volume 15, pages 1-42.). The largest factor (other than “unexplained”) was labor force experience; the average female worker has 12.79 years of full-time experience, while the average male worker has 17.41. This difference accounted for between 26% and 30% of the total wage gap.

Another approach was taken by the economists Robert Wood, Mary Corcoran and Paul Courant (Journal of Labor Economics, volume 11, pages 417-441). They examined one profession (lawyering) in great detail, following the careers of female and male graduates of the University of Michigan Law School. Fifteen years after graduation, the women in their sample were earning 61% of what men earned. A lot of that difference is because many of the mothers had taken time off from work, or worked fewer hours, in order to raise children. But even when the mothers were excluded from the sample, women were still paid only about 80% of what men were paid.

Why assume the “motherhood penalty” has nothing to do with sexism?

It’s true that motherhood makes a difference in wages. But why assume that difference has nothing to do with sexism?

There’s no reason to narrow the discussion to the narrow question of employer discrimination, overlooking ways that the larger society is sexist. Many feminists believe that in a non-sexist society, fathers and mothers would share equally in childcare; and therefore, any “parenting wage penalty” would be split equally among men and women. The fact that women are virtually the only ones hit by the parenting wage penalty doesn’t prove that sexism no longer exists; on the contrary, it shows that sexism still matters, and has a big negative impact on women’s wages. (It also has a negative impact on men’s contact with their families.)

The American job market was designed for men – in particular, it was developed in a society in which workers were men who had a wife at home to take care of the kids. Society has changed, but our jobs haven’t, and that works to the disadvantage of all working mothers (and to mothers who would like to work, but can’t find a job that will give them the flexibility they need to combine work and motherhood). Isn’t it sexist to expect mothers to fit into a work system that was designed for Father Knows Best?

Critics of the wage gap, like Ms. Hausman, claim that mothers freely choose to sacrifice work for family, but how free a choice is that? Mothers don’t have the option of simply ignoring their children’s needs (not only would that be inhumane, it’s also illegal). Even if a father is present, he may refuse to do half of the childcare – or his boss may not be willing to give him the time off. Nor is it practical to just say that “women shouldn’t have children if they want to work” – most families can’t afford to have mothers not work, and our society can’t survive if no one is producing the next generation.

Finally, to whatever extent some women freely choose to stay out of the labor market, the choice isn’t made in a void. The fact that women – even non-mothers – get rewarded less for wage-work than men means that women give less up if they choose to trade off paid work for motherhood. Women’s lower pay means women have less reason to stay in the paid work market; it also means that when a married couple decides that the lower-paid spouse should give up work for children, the spouse who happens to be lower paid will almost always be the wife. Economists call this a “feedback effect”; it’s likely that women earn less because they work less, but it’s also likely that women work less because of lower earnings.

To sum up, motherhood can account for a significant part of the wage gap. But motherhood doesn’t account for all of the wage gap. Nor is it safe to assume that the “motherhood penalty” has nothing to do with discrimination or sexism.

(This is one of a series of posts on the wage gap.)

This is a myth which is frequently repeated by anti-feminists on the internet. Although exact details vary, the argument is generally that the pay gap is a statistical illusion that has nothing to do with discrimination against women. Women are paid less because they work so many fewer hours; if US government statistics took account of hours worked, the wage gap would disappear. So the critics say.

There are two big flaws in this argument. First of all, the numbers don’t add up – taking account of hours worked does make the pay gap a little smaller, but not that much smaller. Second, the argument implicitly assumes that how many hours we get to work isn’t affected by discrimination; but there’s no reason to believe this is true.

How big a difference does hours worked make?

It is true that men work more hours than women, on average (at paid jobs, anyhow – but keep in mind women work many more unpaid hours at home). But the difference isn’t that large, among men and women who work full-time.

According to the US government’s Monthly Labor Review (April 1997, pages 3-14), the average full-time year-round woman worked 40.8 hours a week in 1995. Men, according to the same source, worked 44.5 hours – a significant difference, but not a huge difference (and not nearly as large a difference as anti-feminists sometimes claim). How much does that affect the wage gap?

Fortunately, we don’t have to do the math ourselves – the US Department of Labor has done it for us. According to a DOL web page in 2001 – a web page that, unfortunately, has since been taken down by the Bush administration – comparing only hourly wages, women were paid 83.2% of what men were paid in 2000. 83.2% is a noticible difference from the 76% figure for weekly full-time wages – but it still leaves the majority of the pay gap unaccounted for.

Is hours worked really a discrimination-free zone?

When anti-feminists say that it’s better to compare hourly wages, they’re sneaking an unjustified assumption into the argument. Because part of the pay gap can be accounted for by different hours worked, that part of the wage gap doesn’t, they say, have anything to do with discrimination. But is it really true that how many hours people work can’t be affected by discrimination?

Most people, after all, don’t have that much choice in how much they work. Once you’ve got a full-time job, whether you work 41 or 45 hours a week is as much up to your employer as it is up to you – and it’s quite possible for the hours assigned to be affected by discrimination.

In the eighties, for instance, I worked for a temp agency in NYC which discriminated against its black temps by giving white temps more and better assignments. (I found out when the Times printed a expose of the practice, after which I stopped accepting jobs from that agency). Presumably I earned more than black and latina counterparts that year in part because I worked more hours; but my working more hours was itself a result of discrimination.

The assumption that hours worked can’t have anything to do with discrimination is unrealistic. If discrimination exists in the job market, it potentially has effects on all aspects of the job market – including how many hours a week people work.