Tuesday, April 12, 2011

The Wage Gap

Carrie Lukas does an excellent job debunking the wage gap in an OpJo piece. Acknowledging that the average working woman makes 70% of the average man's wage, it's easy to see that this arises from endogenous factors, not irrational bias against women. The recession highlighted this, as it (predictably) hit men harder.
The Department of Labor's Time Use survey shows that full-time working women spend an average of 8.01 hours per day on the job, compared to 8.75 hours for full-time working men. One would expect that someone who works 9% more would also earn more. This one fact alone accounts for more than a third of the wage gap...

Women gravitate toward jobs with fewer risks, more comfortable conditions, regular hours, more personal fulfillment and greater flexibility. Simply put, many women—not all, but enough to have a big impact on the statistics—are willing to trade higher pay for other desirable job characteristics.
Of course, this doesn't prove that bias doesn't exist. But look at how things go when men and women look statistically similar:
In a 2010 study of single, childless urban workers between the ages of 22 and 30, the research firm Reach Advisors found that women earned an average of 8% more than their male counterparts.
Intelligent accounting for bias needs to come on a much more detailed level: within specific occupations, and at specific companies. It's very difficult, in labor economics, to be certain that unobservable characteristics (say, personality or ambition) are not correlated with observable ones (gender, education, race), and given how drastically men and women differ in their economic choices, it's hard to convincingly show bias in most cases.

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