 Policy
Debate: Does a gender wage gap still exist?
Issues and Background
The average wage gap is not
proof of widespread discrimination, but of women making choices about their
educational and professional careers in a society where the law has granted
them equality of opportunity to do so. Comparable worth promotes a dependence
for women, and a reliance on government for protection. Given women’s
achievements, such dependence is unnecessary. American women enjoy
historically unparalleled success and freedom, and the progress they have
made in the past half century will continue.
~Diana
Furchtgott-Roth
Equal pay has been the law
since 1963. But today, 37 years later, women are still paid less than
men—even when we have similar education, skills and experience.
In 1999, women were paid 72
cents for every dollar men received. That's $28 less to spend on groceries,
housing, child care and other expenses for every $100 worth of work we do.
Nationwide, working families lose $200 billion of income annually to the wage
gap.
It's not like we get charged
less for rent or food or utilities. In fact, we pay more for things like
haircuts and dry cleaning.
~AFL-CIO
The average wage rate for female workers has been below
that for male workers for as long as statistics have been recorded. In recent
years, female wages have been approximately equal to 3/4 of the level of male
wages. At first glance, statistics such as this may suggest that females are
the subject of substantial discrimination in the labor market. There is,
however, a fair amount of disagreement among economists concerning the cause of
this wage differential.
No one seriously disputes the existence of a gender wage differential. The
disagreement primarily focuses on the cause of the wage differential. Is it
the result of gender discrimination? Or is it the result of differences in
other characteristics that are correlated with gender? A study by Jacob
Mincer and Solomon Polachek indicates that much of the gender wage difference
is the result of differences in educational attainment and work experience.
Erica Groshen and others have found that most of the remaining gender wage
differential can be explained by differences in occupational choice.
Thus, the empirical evidence indicates that most (or all) of the
male-female wage differential is due to gender-related differences in
occupational choice, educational attainment, and prior work experience. Those
who argue that the male-female wage differential is not a symptom of
discrimination suggest that this difference is the result of voluntary
decisions on the part of individuals in selecting their careers, educational
attainment, and the level and timing of labor force participation. Those who
believe that the gender wage differential is due to discrimination argue that
discrimination affects women's choice of careers, educational attainment, and
labor supply decisions.
One of the main reasons for the male-female wage differential is that
those occupations that are disproportionately filled by women tend to be
relatively low-paying occupations while male-dominated occupations tend to
offer high wages. Most secretaries, nurses, and elementary school teachers
are women while most engineers, surgeons, computer programmers, and chemists
are men. The "crowding" hypothesis suggests that the low wages
received by women in these occupations is due to a relatively large supply of
labor in these female-dominated occupations. If women voluntarily select
these low-paid occupations then the lower wage is the result of voluntary
choice, not discrimination. This part of the wage differential is the result of
discrimination, though, if women are crowded into these occupations as a
result of barriers to their entry into higher-paying male-dominated
professions. It is expected, however, that as the proportion of women in
male-dominated occupations continues to increase, the wage differential is
likely to narrow.
While there are substantially more women than males in college today, this
is a relatively recent historical phenomena. Until the past 20 years, the
proportion of women attending college was substantially less than the
proportion of males attending college. While the educational attainment of
young male and female workers is quite similar today, older women in the
labor force have lower levels of educational attainment than older males.
Part of the wage differential is due to the lower average level of
educational attainment for women. It is expected that this portion of the
wage differential will narrow over time as more highly educated women enter
the labor market and older women retire.
Until the 1980s, most women withdrew from the labor force for a few years
after the commencement of childbearing. Today, most women with young children
remain in the labor force. A typical woman in the labor force, though, still
has fewer years of prior work experience than a typical male. Since earnings
are strongly related to prior work experience, differences in work experience
explain part of the gender wage gap. It is expected that this part of the
wage differential will decline over time due to declining fertility rates
over the past few decades and the more continuous labor force attachment of
younger female workers.
Those who argue that the wage differential is the result of discrimination
argue that women are more likely to withdraw from the labor force because they
have less to lose by leaving. Lower wages and reduced chances of promotion
lower the incentives of women to remain in the labor force. This argument
suggests that the causality between work experience and wages is
bidirectional. While lower female wages may be partly due to lower levels of
work experience, these lower levels of work experience are also partly caused
by lower female wages.
Those who believe that the male-female wage differential is the result of
labor market discrimination sometimes suggest that a "comparable
worth" pay structure be introduced to eliminate the gender wage gap.
Under a comparable worth pay system, jobs are rated according using a number
of criteria such as: educational requirements, manual dexterity requirements,
job stress, risk of injuries, etc. Jobs that have similar ratings are
assigned the same pay. Advocates of such a system suggest that this system
results in equal pay for equivalent work. Some studies, for example, have
suggested that secretaries and truck drivers are "comparable" jobs.
Both involve long periods of sitting, similar amounts of training, and
repetitive tasks. Therefore, it is argued, the pay of secretaries (a
female-dominated occupation) should be equal to the pay of truck drivers (a
male-dominated occupation).
Opponents of comparable worth pay structures argue that the lower wage
rate for secretaries is the result of "crowding" in this labor
market. Higher pay rates would encourage more people to enter an occupation
in which wages were initially low because there were already too many workers
in this labor market. A reduction in the pay rate for truck drivers would
cause fewer people to enter an occupation in which pay is initially high
because there are relatively few people willing to work in this occupation.
Those who oppose comparable worth pay structures argue that they would result
in economic inefficiency by causing surpluses in labor markets in which pay
is raised and shortages in those labor markets in which pay is lowered.
While there are several reasons to believe that the gender wage gap will
be reduced in the future, this wage gap remains relatively large. As long as
this gap remains, this issue is likely to provide a major source of debate
among economists, policymakers, and the general public.
Primary Resources and Data
- Equal Pay Act of
1963
http://www.eeoc.gov/laws/epa.html
The Equal Pay Act of 1963 was designed to eliminate gender
discrimination in wages. This Act prohibits sex discrimination in wages
for male and female workers in a given firm. It allows pay differentials
based upon length of job tenure, merit, and productivity differentials.
- Title VII of the
Civil Rights Act of 1964
http://www.eeoc.gov/laws/vii.html
Title VII of the Civil Rights Act of 1964 explicitly banned gender
discrimination in hiring or in establishing wage rates.
- U.S. Council of
Economic Advisers, "Explaining Trends in the Gender Wage Gap"
http://clinton4.nara.gov/WH/EOP/CEA/html/gendergap.html
This June 1998 report examines the reasons for the existence of the gender
wage gap. It is noted that a substantial portion of the wage gap may be
explained by differences in education, work experience, hours of work,
and occupational choice. The difficulties in separating the effects of
discrimination from the effects of preferences and choice are also
discussed.
- U.S. Equal
Employment Opportunity Commission (EEOC)
http://www.eeoc.gov/
The U.S. Equal Employment Opportunity Commission (EEOC) web site
contains information on employment law related to gender discrimination.
Methods of remedying discrimination are also discussed.
- U.S. Equal
Employment Opportunity Commission, "Job Patterns For Minorities And
Women In Private Industry, 1999"
http://www.eeoc.gov/stats/jobpat/jobpat.html
This web site, provided by the U.S. Equal Employment Opportunity
Commission, shows the proportion of women employed in an extensive set
of occupations. Data is sorted by 3-digit SIC code and by job category
within the industry.
- National
Organization for Women
http://www.now.org/
The web site of the National Organization for Women contains arguments
suggesting that gender discrimination is a significant factor in
explaining the male-female wage differential. The Economic
Equity and Affirmative
Action pages on this site are of particular relevance.
- National
Committee on Pay Equity
http://www.feminist.com/fairpay/
The National Committee on Pay Equity argues for the elimination of the
gender wage gap. They provide statistics on the magnitude of the
male-female wage gap over time, and a table listing earnings by
education (this does not take into account, however, the effect of
occupation and work experience). This group argues for legislation that
attempts to eliminate the gender wage gap.
- U.S. Department
of Labor Women's Bureau
http://www.dol.gov/dol/wb/
The Women's Bureau of the U.S. Department of Labor posts an extensive
collection of information related to female labor force activity.
- U.S. Department
of Labor Women's Bureau, "Earnings Differences Between Men and
Women"
http://www.dol.gov/dol/wb/public/wb_pubs/wagegap2000.htm
This online document, provided by the U.S. Department of Labor Women's
Bureau, contains a good discussion of the history and causes of the
gender wage gap.
- U.S. Bureau of
the Census, "Money Income in the United States, 2000"
http://www.census.gov/prod/2001pubs/p60-213.pdf
This Census Bureau document contains detailed statistics on the
distribution of income and earnings in the United States. It documents
the magnitude of the male-female earnings differential. Income
statistics are available by gender, educational attainment, and
ethnicity. The Adobe acrobat viewer plugin is required to view this
document. You may download this viewer by clicking here.
- Bureau of Labor
Statistics, "Highlights of Women's Earnings in 2000"
http://www.bls.gov/cps/cpswom2000.pdf
This report summarizes data on the male-female wage gap in 2000. It finds
that average weekly earnings of full-time women workers was 77% of the
level of full-time male workers. This study also notes that the wage gap
is larger for older workers than for younger workers. Evidence of a
decline in the wage gap over time is also discussed in this report. The
Adobe acrobat viewer plugin is required to view this document. You may
download this viewer by clicking here.
- U.S. Department
of Labor Women's Bureau, "Median Annual Earnings in Current and
1999 Dollars for Year-Round Full-Time Workers by Sex, 1951-99"
http://www.dol.gov/dol/wb/public/wb_pubs/achart.htm
This web page contains statistics on nominal and real median earnings
for full-time male and female workers during the years 1951 through
1999. A small narrowing of the gender wage gap during this period is
apparent.
- U.S. Department
of Labor Women's Bureau, "Women's Earnings as Percent of Men's,
1979-2000"
http://www.dol.gov/dol/wb/public/wb_pubs/2000.htm
The table appearing on this page lists hourly, weekly, and annual
earnings for women as a percent of men's income for the years 1979-2000.
The effect of lower average weekly and yearly hours of work for women is
apparent in the smaller earnings gap that occurs when this is measured
in terms of hourly earnings.
- Philip L. Rones,
Randy E. Ilg, and Jennifer E. Gardner, "Trends in Hours of Work
since the mid-1970s"
http://stats.bls.gov/opub/mlr/1997/04/art1full.pdf
Philip L. Rones, Randy E. Ilg, and Jennifer E. Gardner find that women
are exhibiting more continuous labor force participation in this April
1997 Monthly Labor Review article. The Adobe acrobat viewer
plugin is required to view this document. You may download this viewer
by clicking here.
- U.S. Department
of Labor, "Nontraditional Occupations for Women in 2000"
http://www.dol.gov/dol/wb/public/wb_pubs/nontra2000.htm
The U.S. Department of Labor provides this list of occupations in which
relatively few women are employed. Statistics are provided on the number
of women employed in each occupation, the average weekly wage, the
gender wage gap, and the proportion of women in each occupation.
- U.S. Department
of Labor, "20 Leading Occupations of Employed Women, 2000 annual
averages"
http://www.dol.gov/dol/wb/public/wb_pubs/20lead2000.htm
This page, provided by the U.S. Department of Labor, contains
information on the 20 occupations that employ the largest number of
women. Statistics are provided on the number of women employed in each
occupation and the proportion of women in each occupation.
- U.S. Department
of Labor, "Women's Jobs 1964-1999: More than 30 Years of
Progress"
http://www.dol.gov/dol/wb/public/jobs6497.htm
This online document contains a series of charts and graphs that
illustrate the expanding role of women in the labor market during the
years 1964 to 1999.
- U.S. Department
of Labor, "Occupational Outlook Handbook"
http://www.bls.gov/oco/
The Occupational Outlook Handbook contains detailed descriptions
of job duties and employment prospects in a wide variety of occupations.
- Christopher Snowbeck,
"Study Uncovers Gender Gap in Physician Pay"
http://shns.scripps.com/shns/story.cfm?pk=WOMENDOCTORS-07-18-00&cat=AH
This July 18, 2000 news article discusses a University of Pittsburgh
study that finds that female physicians earn significantly less than
male physicians. In particular, this study finds that the hourly wage of
female physicians is 14% below the wage of male physicians.
- Cornell
University, "Cornell Couples and Careers Study"
http://www.lifecourse.cornell.edu/cci/current.html
This web site contains information about the Couples and Careers Study
conducted by Cornell University. This study collected information on
dual-earner households using "focus groups, in-depth interviews,
surveys, and organizational records." This study finds that workers
feel constrained by career considerations to work more than their
desired number of hours. Evidence is also presented that indicates that
men still spend more time in paid market labor than their working wives.
Different Perspectives in the Debate
- Anita U.
Hattiangadi, "'Where's My 26 Cents?': Choices Explain Gender Wage
Gap"
http://www.epf.org/ff/ff4-6.htm
Anita U. Hattiangadi, in this Employment Policy Foundation article,
discusses the magnitude and causes of the gender wage gap. She notes
that most of the observed differences in male and female wages can be
explained by differences in average hours, work experience, educational
attainment, and career choice.
- Diana
Furchtgott-Roth, "The Statistically Misleading 74 Cent Wage
Gap"
http://www.aei.org/ct/ctdfr.htm
Diana Furchtgott-Roth argues that the observed gender wage gap is due to
educational, career, and family choices on the part of women in this
April 12, 1999 testimony before the Equal Employment Opportunity
Commission. She suggests that a comparison of the average wages of male
and female full-time workers is meaningless since it does not control
for gender differences in average hours, educational attainment,
occupation, and other factors that affect wages. She argues that
existing laws are sufficient to deal with actual cases of gender
discrimination and warns that comparable worth plans result in inefficient
outcomes.
- Women Employed
Institute and the Office for Social Policy Research at Northern Illinois
University, "Two Sides of the Coin: A Study of the Wage Gap Between
Men and Women in the Chicago Metropolitan Area"
http://www.ssri.niu.edu/wei.html
This October 1994 study found that the gender wage gap in Chicago was
larger than that measured at the national level. They found that
differences in educational attainment could not account for the observed
wage gap. A mix of corporate and government policies were recommended to
reduce this gap.
- Howard J. Wall,
"The Gender Wage Gap and Wage Discrimination: Illusion or
Reality?"
http://www.stls.frb.org/publications/re/2000/d/pages/economic-backgnd.html
Howard J. Wall discusses the gender wage gap in this October 2000
article appearing in The Regional Economist, a publication of the
St. Louis Federal Reserve District Bank. He argues that the evidence
indicates that at most 25% of the gap is due to discrimination; the
remaining 75% or more of the wage gap is due to differences in hours
worked, educational attainment, work experience, and occupation. Wall
cites a study by Blau and Kahn that indicates that 6.2 cents of the
gender wage gap is due to unexplained factors. This unexplained
component may be the result of discrimination, or unobservable
differences in human capital investment. Wall notes that it is difficult
to determine whether occupational segregation is the result of voluntary
choice or of labor market discrimination that limits employment choice
for women.
- Deborah Walker,
"Value and Opportunity: The Issue of Comparable Pay for Comparable
Worth"
http://www.cato.org/pubs/pas/pa038es.html
Deborah Walker examines the economic arguments concerning comparable
worth legislation in this May 31, 1984 Policy Analysis article.
She argues that wage differentials across occupations reflect
differences in society's evaluation of the services provided by workers
in these occupations. Market determined wages encourages the flow of
labor to those markets in which the labor services are most highly
valued. Walker argues that a comparable worth pay system disrupts this
process and encourages labor to shift from high-valued to low-valued
uses.
- AFL-CIO,
"Working Women"
http://www.aflcio.org/women/index.htm
This web site contains links to a variety of pages discussing the
AFL-CIO's position on the gender wage gap. Numerous statistics are
presented supporting the existence of a gender wage gap.
- AFL-CIO,
"How Much Will the Pay Gap Cost You?"
http://www.aflcio.org/women/calculat.htm
This page, provided by the AFL-CIO provides an online calculator that
measures the impact of the wage gap on women's lifetime earnings. (The
assumptions and underlying model used to compute these results do not
appear to be specified on this page.)
- Borgna Brunner,
"The Wage Gap: A History of Pay Inequity and the Equal Pay
Act"
http://www.infoplease.com/spot/equalpayact1.phtml
Borgna Brunner provides a brief history of the gender wage gap and the
Equal Pay Act in this article. She notes that, until the early 1960s,
jobs were listed separately for men and women with different pay rates,
even for identical jobs. Brunner observes that a substantial gender wage
gap still exists nearly 30 years after the passage of the Equal Pay Act.
- Patricia
Hausman, "I Am Woman, Hear Me Whine"
http://www.dadi.org/wom_whin.htm
Patricia Hausman argues, in this April 3, 2001 online article, that the
gender wage gap is very small. She suggests that many activists ignore
studies that indicate that most of the male-female wage differential is
the result of differences in hours worked, previous work experience,
educational choice, and occupational choice.
- Naomi Lopez,
"Free Markets, Free Choices II: Smashing the Wage Gap and Glass
Ceiling Myths"
http://www.pacificresearch.org/pub/sab/health/ceiling/0499ceiling.html
Naomi Lopez argues, in this online article, that the wage gap does not
exist when fields of study, educational attainment, and work experience
are held constant. She suggests that unequal outcomes are the primarily
the result of individual preferences and decisions, not discrimination.
- Tony Dobbins,
"Gender Wage Gap Examined"
http://www.eiro.eurofound.ie/2000/11/features/ie0011160f.html
In this November 2000 article appearing on Eironline, Tony Dobbins
discusses trends in the gender wage gap in Ireland. He notes that the
gender wage gap had fallen from 20% in 1987 to slightly over 15% in
1997. Dobbins cites studies that suggest that approximately
three-fourths of the wage gap can be explained in terms of differences
in labor force participation and other factors. The remaining one-fourth
of the wage gap may be the result of discrimination. He argues that
"high-quality, affordable childcare, particularly for low-income
families and single mothers, is crucial" if the gender wage gap is
to be reduced.
- U.S. Department
of Education, "The Condition of Education 1995: Educational
Progress of Women"
http://www.ed.gov/pubs/CondOfEd_95/ovw3.html
This 1995 report describes the increase in female educational attainment
that has been occurring for the past several decades. It notes that
women tend to start school earlier and are less likely to repeat a
grade. It is observed that females tend to receive higher verbal scores
on standardized tests, but lower science and math scores. This report
also notes that women are much more likely to major in education,
English, foreign languages, communications, psychology and health-care
fields. Women are less likely to declare college majors in math,
engineering, computer science, or the physical sciences.
- National Center
for Educational Statistics, "Women in Mathematics and Science"
http://nces.ed.gov/pubs97/97982.html
This July 1997 report examines trends in women's education in
mathematics and science. It is observed that males and females have
similar performance levels in math and science until age 13. While there
gender difference in math scores appears to be declining, the gender
difference in science scores has remained relatively large. While
similar proportions of males and females complete advanced math and
science classes in high school, their performance tends to be lower.
This report indicates that women are much less likely to select math or
science related majors in college. It is also observed that female
science majors tend to receive lower salaries than their male
counterparts in their first job after college.
- Alicia C. Dowd,
"Collegiate Grading Practices and the Gender Pay Gap"
http://epaa.asu.edu/epaa/v8n10.html
Alicia C. Dowd examines the effect of grading policies by academic
departments on the gender pay gap in this January 27, 2000 article
appearing in Education Policy Analysis Archives. She observes
that math related majors (such as mathematics, economics, chemistry,
engineering, and physics) assign lower average grades to students than
do departments in which verbal skills are more important (such as
English, history, and education). Dowd cites studies that indicate that
women are more likely than males to avoid majors in which they
experience relatively low grades. This, combined with the fact that
college-age females tend to have higher verbal and lower math skills,
encourages females to major in those disciplines in which verbal skills
are highly valued. Males are more likely to major in disciplines that
rely on high levels of mathematical skills. Because math-oriented majors
are more highly valued in the labor market, males receive higher wages.
Dowd suggests that grading policies should be standardized across
academic departments to allow grades to be a better signal of relative
performance.
- Brown
University, "Achieving Gender Equity in Science Classrooms: A Guide
for Faculty"
http://www.brown.edu/Administration/Dean_of_the_College/homepginfo/equity/Equity_handbook.html
This online document examined methods of retaining more women in math
and science related majors. Several studies are cited that examine why
women are less likely to major in such disciplines. It is argued that
the gender gap in science related fields could be reduced if teaching
styles are modified to accommodate a wider variety of learning styles.
- Minnesota
Department of Employee Relations, "Pay Equity / Comparable
Worth"
http://www.doer.state.mn.us/lr-peqty/lr-peqty.htm
The Minnesota Department of Employee Relations web site contains
detailed information about the implementation of their comparable worth
pay system. This site even includes downloadable pay equity analysis
software that may be used to assist in the implementation of a
comparable worth pay system.
- Steven E.
Rhoads, "Would Decentralized Comparable Worth Work? The Case of the
United Kingdom"
http://www.cato.org/pubs/regulation/reg16n3e.html
In this in this Cato Regulation article, Steven Rhoads examines
the "equal value" pay system used in England. This system is
essentially a decentralized form of a comparable worth pay structure in
which firms can use any nondiscriminatory pay system. Disputes are
resolved in industry tribunals consisting of three people, one of whom
is a lawyer. Independent experts render opinions on the merits of these
cases. Rhoads notes that the lack of uniform standards result in the use
of a wide variety of standards by these experts in evaluating
discrimination cases. He finds that the U.K. system provides arbitrary
results. Rhoads believes that concerns over this arbitrary process will
eventually result in the adoption of centralized standards. He suggests
that such a centralized system will still result in arbitrary and
inefficient outcomes.
- Ann Crittenden,
"Mothers Pay Price for Nurturing Human Capital"
http://www.womensenews.org/article.cfm?aid=456
In this February 21, 2001 article, Ann Crittenden argues that society
generally undervalues the role that women play in creating human
capital. She notes that women play the largest share in creating human
capital through childbearing and childrearing. Yet, these activities
tend to be unrecognized because no salary is attached to these tasks.
GDP undercounts the value of women's contribution because it does not
measure the value of unpaid activities. Crittenden argues that divorce
laws in many states also do not fully take into account the value of the
household services provided by women. She suggests that this results in
a dependency that is harmful to women.
- Infoplease.com, "The Wage Gap in Pro
Sports"
http://ln.infoplease.com/spot/sptwagegap1.phtml
This online article describes gender differences in wages in
professional sports as well as gender differences in access to sports scholarship
funds.
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