(My apologies my my sister who already had to read a lengthy email I sent her regarding this topic)I was watching a CNN video which talked about the continued wage-gap between men and women and heard the same lines I've been hearing for years: "Unfortunately, gender discrimination in the workplace still exists and is reflected by reduced earning potential in terms of real salaries." This unqualified argument has always piqued my interest so this time I decided to do some research. Not only did I find that most of the claims were based on a single publication, but that single publication was basing it's claims on a household survey the Bureau of Labor Statistics puts out. Further, the publication even admits that 75% of the variation can likely be explained by innocent variables and the 25% remaining "may" be caused by discrimination or may be caused by something else. This is the basis for the argument of gender-based wage discrimination which has become accepted as fact by mainstream society?
The truth is, there does seem to be a statistically significant wage differential based on gender. But does it arise from discrimination? I think not. This article, by Steve Chapman, a couple years ago does a great job explaining what other variables do a much more complete job at explaining the variation between male and female wages. I'll give you the executive version: pay differences can mostly be explained by choices in terms of specific jobs, hours and specifically over-time hours dedicated to that job, and questions regarding family (not just maternity leave but the fact that women often sacrifice opportunities for job advancement if it presents obstacles to their role as mothers). This had also been the main argument of the respected Harvard labor economist Claudia Goldin.
Here's another interesting snippet from the article:
June O'Neill, an economist at Baruch College and former director of the Congressional Budget Office, has uncovered something that debunks the discrimination thesis. Take out the effects of marriage and child-rearing, and the difference between the genders suddenly vanishes. "For men and women who never marry and never have children, there is no earnings gap," she said in an interview.
If anyone wants to discuss the topic more, let me know. This, and a lecture I attended recently, have gotten me interested in labor economics!
Matt! great post. I can definitely see where this article comes from and it makes complete sense. Though, something inside of me finds it hard to believe that with every other variable taken out, men and women make the same amount of money. Of course, I have nothing to back this up but my gut. And that's not always a reliable barometer. I still maintain that when I grow up I will establish a company where we only hire women and minorites, if you're nice, I'll let you be the token white guy ;) miss you!
ReplyDeleteWhile reading this I got a wicked case of deja vu... Honestly, I could have sworn I had justtt read something about this question of wage discrimination, but can't remember where. Either way it certainly piqued my interest as an interesting new way of thinking about wage dynamics.
ReplyDeleteI would tend to agree that most people could dismiss this as an issue that would be "common sense." Like you said, the ideas of gender income disparities have been shoved in our face for years to the point where it's almost accepted as fact. It takes a more careful analysis to really look deeper at all the factors that might be causing this difference in pay.