ONE issue that virtually every Democratic presidential candidate has weighed in on this year is the wage gap between the sexes. The most commonly-cited statistic is that women make just 77 cents for every dollar men do, with the implication being that the 23-cent gap is a result of discrimination. While the statistic is accurate, interpreting it requires some nuance: at least some of the gender pay gap can be explained by differences in things like the number of hours worked or type of careers each gender pursues.
Economic research suggests that the majority of the gender pay gap is because of differences within occupations rather than across them. What is tougher to determine is if women make less for “same work”: studies tend to rely on data from the US Census Bureau and the Bureau of Labour Statistics which are reliable but lack detail when it comes to specific occupations. For instance, in the American Community Survey, one of the most popular sources of data, all doctors fall under the classification “physicians and surgeons” which is problematic since salaries can vary greatly depending on what sort of specialism they practice.
A new report from PayScale, a jobs website, takes a stab at this very problem by looking at the gender gap in various occupations controlling for factors including experience, education, company size, and crucially, job title. According to their data, female doctors make 29.2% less than their male counterparts, but that gap shrinks to just 4.6% after introducing the controls. This in part because women are more likely to work in paediatrics, while men are more likely to work in the better-paid field of surgery. A similar pattern exists for lawyers: women make 14.8% less than men, but just 4.1% less on an adjusted basis. Again, there are differences in the types of jobs taken by men and women: 8.7% of female lawyers work for non-profit outfits, compared to just 4.5% for male ones. The pay gap for all workers is 25.6% before such differences are controlled for, and 2.7% afterwards.
A paper published last year by Claudia Goldin, an economist at Harvard University, noted that the gender pay gap was especially acute in law and business, despite the fact that fresh graduates in those fields started at similar salaries. The problem, Ms Goldin notes, is that succeeding at such professions requires copious amounts of “face time”. On the other hand, pharmacists, for whom there is little penalty for working part-time, experience virtually no gender pay gap.
Another study by Ms Goldin and Lawrence Katz (also of Harvard) noted that being away from work for 18 months was associated with a 29% drop in earnings for mid-career lawyers and PhDs, and a 41% for MBAs. In effect, much of the gender pay gap can be thought of as the cost of having children.
In one sense, PayScale’s findings are obvious: one should not expect too much of a difference in pay for two people doing the exact same job. What the report does do is help policymakers ask the right questions. Rather than fixating on just the overall ratio earnings between men and women, it would be more interesting to ask who gets which jobs and why.