Women’s Pay And The Nobel Prize
– By Howard Sierer –
“Lies, damned lies and statistics.” Mark Twain is credited with popularizing this phrase and does it ever apply to the frequent claim that women’s pay lags far behind that of men, even in comparable jobs.
Harvard economics professor Claudia Goldin was awarded the 2023 Nobel Prize for Economic Science this month for her decades of work on what is often referred to as the “gender gap.” The Royal Swedish Academy says she advanced the “understanding of women’s labor market outcomes.”
Armed with an economics Ph.D. from the University of Chicago, Goldin studied the pay differential between men and women from a number of angles. She describes two kinds of gender gaps: the gap in employment and the gap in earnings.
Among her first publications, Goldin highlighted that in the first half of the last century women who’d worked as laborers on family farms often were no longer needed there as farms became increasingly mechanized and productivity increased. But finding jobs “in town” was difficult to balance with rearing children. Women’s participation in the workplace increased as birth control pills became widely available in the 1960s and the number of children per family began to drop.
As women began to take more full-time, year-around jobs, the gender pay gap became big news in the nascent women’s rights movement. The female-to-male ratio of average earnings was 60% in the 1980s, rising to 75% by 2000 and is about 83% now. These broad brush figures are often quoted to show that women are discriminated against in the workplace.
Goldin was among the first to look into the factors that cause this disparity, recognizing that education and choice of career field explained much of what was happening. She gathered data and took into account differences in occupations, education, hours worked and job experience.
Along with other labor economists, Goldin pointed out the importance of the choice of occupation as the dominant factor in the gender pay gap. In many cases, occupation reflects the choice of college major.
A 2008 study cited by the Nobel committee found that for women who had a labor-force attachment like that of men, the choice of college major accounted for more than half of the gender earnings gap. For example, women compose 47% of today’s U.S. workforce but fill only 34% of high-paying science, technology, engineering and math (STEM) jobs.
To compare earnings of men and women in the same occupation and with the same or similar schooling, Goldin and collaborators studied MBA students who graduated from the University of Chicago’s business school between 1990 and 2006. They found almost no gender gap in employment or wages just after graduation. But after 10 years on the job, a male/female pay gap had opened.
They found that three factors – which MBA courses were taken along with performance in those courses, time away from work, and the number of hours worked – explained all but 3% of the wage gap. The women had taken an average of one year off from work, while men had taken off only 1½ months. The difference in time away from work was explained by child rearing.
In a related study, Goldin pointed out that women often receive a wage penalty by taking jobs that are flexible enough for the woman to be the “on-call parent” when a child needs immediate parental attention at home or school. In contrast, men who are willing instead to be an “on-call employee” working overtime or in emergencies are apt to receive a wage premium.
Women’s advocates and the politicians they influence often jump to policy conclusions based on median incomes without appreciating the insights and explanations that Goldin and others have offered. For example, she was asked to what extent Title VII of the 1964 Civil Rights Act that outlaws discrimination on the basis of sex and subsequent affirmative action programs narrowed the gender pay gap. Her reply: “There is only scant evidence that either law has had any effect on the gender gap in earnings or occupations, although not enough research has been done to justify strong conclusions one way or the other.”
The next time you hear or read someone complaining about the gender pay gap, remember that a Nobel Prize-winning economist won her award by explaining why there is almost no gap when apples are compared with apples instead of with oranges. Further, she found no reason to believe that additional government actions, for example, the Equal Rights Amendment, would make any difference.
Are women discriminated against in the workplace? Some almost certainly are, but there is no widespread societal conspiracy to hold them back, only the actions of a diminishing number of narrow-minded managers who limit the talent available to their organizations.
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Your summation is lacking when you posit that there is no need for an Equal Rights Amendment because this body of work demonstrates there is little gap in equal pay. The ERA is much broader and addresses other issues of concern.
P sheffield, The ERA is purely symbolic and would have no practical, meaningful effect. I have challenged other ERA supporters and challenge you as follows:
1) Name one federal law that discriminates against women in any meaningful way, that is, something substantial and not purely symbolic such as where terms like “policeman,” “fireman” or “postman” are used. Likewise, name any law at any state or local government level anywhere in the country that discriminates against women.
2) The Equal Protection Clause of the Constitution’s 14th Amendment has been consistently interpreted to provide equal rights for women. It forms the basis for a number of federal laws ensuring those rights including Title VII that I referenced in my column. It also underpins many state and local laws around the country. If this body of existing laws is inadequate, please describe an additional law that is needed to ensure women’s rights and, importantly, how you would enforce it.
I look forward to your reply and I’m sure eager legislators around the country would relish the chance to introduce such legislation to burnish their image as protectors of women’s rights.
Please note that I agree that women are discriminated against in a variety of subtle, frustrating ways. My argument is that there are no meaningful ways to use the law to remedy these injustices. Only as hearts and minds are changed will those ills be cured.