Rational Action

I was watching Hardball the other day when I heard a woman named Kate O’Beirne of the National Review make this outrageous claim:

[Feminists] get a lot of mileage out of the fact, the claim, that women work for 76 cents on the dollar. Think about that for a minute. If a woman with the same education level, skills, and experience would work for 76 cents to a man’s dollar, who would ever hire a man? There is no discriminatory wage gap.

O’Beirne is right in some narrow sense, since the “gender pay gap” ought to apply when a man and a woman of equal qualification receive different wages, and “76 cents on the dollar” does not take into account differing characteristics between the genders. Women tend to have less experience in the labor market and tend to work in lower-paying occupations, so simply comparing the average wage of women and men reveals little about whether woman are being shortchanged given their acquired ability.* To show that O’Beirne is being mendacious we’ll have to look a little more closely at the labor market.

Thankfully, two labor economists have done the work already. The Gender Pay Gap, a paper published in the Journal of Economic Perspectives by Francine Blau and Lawrence Kahn, presents the mountain of evidence that gender discrimination exists in the labor market. And by the way, those who don’t have to read economics papers for homework should know that the JEPr is a very well respected publication — in other words, not the place one would go to publish his or her political hackery.

Blau and Kahn use data from a representative sample of the United States, and they find that taking into account factors like education and occupation narrows the gender gap, but does not close it. When all is said and done, they find a pay gap of 12 cents on the dollar between statistically identical women and men.

There are caveats here. We think of the gender pay gap as the unexplained difference between the wages of men and women, and we may well be missing a relevant variable that could help explain it. However, other studies have sought and succeeded in finding evidence of discrimination without using Blau and Kahn’s data. For example, one study tracked the wages of a well specified group of UMich law school graduates, finding that the unexplained pay gap widened to 40 cents on the dollar after 15 years.

O’Beirne has some explaining to do. She is certain that profit maximizing pressure would eliminate any gender wage gap, but in this world men and women with the same qualifications take home significantly different wages. The best evidence we have says she is at least probably wrong. The wonders of empiricism!

Then again, the fault of empiricism is that it doesn’t say much about the “why”. I have a few ideas, and I also have an economic model (not my own, duh.) The model I find not so realistic, but maybe I’ll talk about it. Economics can help answer this question but I think other disciplines can provide elegant, maybe more convincing, explanations. Shoot, if you want to.

* That sounds obnoxious. I certainly don’t mean that women are inherently inferior. I believe that women are socialized into getting less schooling and avoiding certain subjects. This post is a direct response to the claim that men and women receive equal pay for equal work.

This entry was posted on Wednesday, January 11th, 2006 at 2:25 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.