An Analysis of Reasons for the Disparity in Wages Between Men and Women

[cptacek]

An Analysis of Reasons for the Disparity in Wages Between Men and Women
http://chamberpost.typepad.com/files...nal_report.pdf

FOREWORD
By the U.S. Department of Labor
During the past three decades, women have made notable gains in the workplace and in pay equity, including increased labor force participation, substantial gains in educational attainment, employment growth in higher paying occupations, and significant gains in real earnings.

In 1970, about 43 percent of women aged 16 and older were in the labor force; by 2007, over 59 percent were in labor force.

In 1970, only 17.9 percent of women aged 25 and older had gone to college; by 2000, almost half had gone to college; and by 2006 one-third of the women in the labor force held a college degree.

In 2007, women accounted for 51 percent of all workers in the high-paying management, professional, and related occupations. They outnumbered men in such occupations as financial managers, human resource managers, education administrators, medical and health services managers, and accountants and auditors.

In 1970, the median usual weekly earnings for women working full-time was only 62.1 percent of those for men; by 2007, the raw wage gap had shrunk from 37.9 percent to just 21.5 percent.

However, despite these gains the raw wage gap continues to be used in misleading ways to advance public policy agendas without fully explaining the reasons behind the gap. The purpose of this report is to identify the reasons that explain the wage gap in order to more fully inform policymakers and the public.

The following report prepared by CONSAD Research Corporation presents the results of a detailed statistical analysis of the attributes that contribute to the wage gap and a synopsis of the economic research that has been conducted on the issue. The major findings are:

There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1 and 76.4 percent of a raw gender wage gap of 20.4 percent, and thereby leave an adjusted gender wage gap that is between 4.8 and 7.1 percent. These variables include:

A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.

A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.

This report was on the Department of Labor website Jan 2009, soon after the report was finalized, but was removed. The above link is an archive copy by a blogger, as it is no longer available from the government.

[am_vanquish]

I wouldn't be able to find it now, but I recall reading about a study in the last couple of years that was able to reduce the "adjusted gap" even further by looking at how men & women perceive risk in the workplace. It basically suggested that men take higher levels of risk in career moves that inflated their wages, even within the same profession.

So, on average, male accountants take on more challenging clients/problems than female accountants, and they are compensated at a higher rate for the more challenging work.

The details are a bit fuzzy, but I believe the study also included an analysis of testosterone levels in males/females and the way they view risk/return. They basically set up a study that used a virtual career role-play game (similar to the game Life, but isolated to career decisions) while measuring the testosterone levels of the study participants. They found that the simulated wage gap for men and women with high testosterone levels was much smaller than the gap for men and women with low testosterone levels. Essentially, the testosterone level was driving the risk tolerance which was driving the wage gap.

[jIM_Ohio]

I agree the risk/reward factors in. I am willing to take risks to get ahead, my wife enjoys her job and would prefer status quo, flexibility and paychecks.

The bigger issue is what I call the ceiling effect, I have heard some say the incompetence effect, or similar- basically it means a person gets promoted to a level of comfort (or imcompetence) and stays there.

I work for a company with 400,000+ employees, many mid level managers have been the same since I was hired in 1997 (two of the 16 I am thinking of are new since 1997). Meaning those people found a level of compensation, competence and time they are comfortable with, and do not see a need to get higher.

It is my opinion that women, in general, will reach that level earlier in life because of families. It is a generalization, the "average" shows it is real IMO.

[LttlDriver]

hmmmmm, always an interesting subject

[wincrasher]

I hear a Pandora's box squeaking open....