understanding politics, considerations

Is There a Gender Salary-Gap in Wages?


December 24th, 2006 · Business, Economics, and Finance, World Affairs

gender salary gapThis New York Times arti­cle describes an inter­est­ing development:

Through­out the 1980s and early ‘90s, women of all eco­nomic lev­els — poor, mid­dle class and rich — steadily gained ground on their male coun­ter­parts in the work force. By the mid-‘90s, women earned more than 75 cents for each dol­lar in hourly pay that men did, up from 65 cents 15 years earlier.

Largely with­out notice, how­ever, one big group of women has stopped mak­ing progress: those with a four-year col­lege degree. The gap between their pay and that of male col­lege grad­u­ates has widened slightly since the mid-‘90s.

There are two major prob­lems with the arti­cle, and it is likely due to either the reporter ana­lyz­ing the study incor­rectly or the study itself being flawed.

First, the arti­cle only seems to lump “female col­lege grad­u­ates” against “male col­lege grad­u­ates.” Obvi­ously there is a wide spec­trum within these two groups — par­tic­u­larly with regards to what an indi­vid­ual stud­ied. Most edu­ca­tion majors are women while most future engi­neers are men. (The lat­ter pro­fes­sion earns much more than the for­mer.) If the study did not take this into account — and we can­not know for sure — then the data is meaningless.

Sec­ondly, any study com­par­ing the wages of men and women is going to pro­vide incon­clu­sive data. One can­not aver­age the salaries of all male [insert pro­fes­sion here], and then com­pare that with the aver­age salary of their female coun­ter­parts and reach a valid conclusion.

Here’s why: to state that gen­der itself is the rea­son that women are earn­ing less, you need to iso­late that as the only vari­able in a study. You need to take into account level of edu­ca­tion, prior expe­ri­ence, work per­for­mance and total hours worked, along with a near-infinite num­ber of other fac­tors that come into play with regards to salary. In other words, if every­thing is the same except for gen­der and a dif­fer­ence in salary exists, then one can state that gen­der is the cause.

If a study can iso­late gen­der — in other words, if it can con­trol for every other fac­tor that helps to deter­mine salary — then that will be a report to take seri­ously. But I have yet to see a study that does that.