The Gender Pay Gap Revisited

Feminists claim that one example of sexism in society is the fact that women get paid less than men. Conservatives counter by claiming that this difference is not due to sexism but to actual differences between men and women. They claim that men are better educated, have more experience and specialise in better paying (often more dangerous jobs). So which is it? Is the gender pay gap an example of sexism in society or is it just a myth that denies genuine differences in work done?

First of all, both sides agree that the average woman is paid significantly less than the average man. In Ireland this gap is 14% and 15% in the UK, 16% across the EU and 23% in the US. So neither side disputes that on average women are paid less than men, the dispute is over why this is the case. The gap is much higher for richer people, part time people and those in the private sector.

Conservative argue that it is differences in work done not differences in gender that explains the pay gap. They argue that women have less experience, work less hours and are concentrated in lower paying industries and occupation. Women are concentrated in clerical and social occupations which pay less. They also take more time out to raise their children and generally place a higher value on family life than their career. Their skills may “rust” during this time out and women may be reluctant to invest as much in human capital if they know they won’t be working as much. In contrast men work continuously through their career and for this reason are paid more. Thus the pay gap is due to choices that women make rather than discrimination.

So what does the evidence say? A study on the Irish pay gap conducted in 2009 and using 2003 data found that women were paid 22% less than men. By far the largest explanatory factor was that men had more experience, however, this could only explain why women were paid 3% less. Other factors included the likelihood of being in a supervisory position or member of a trade union. The gap due to differences in employment sector was smaller than would be supposed, responsible for only 3% of a pay gap. While women were found to be heavily concentrated in clerical and sales occupations, these are as skilled as male dominated plant and craft occupations. However, 8% of the pay gap (one third of the total difference) could not be explained, suggesting this was the amount of discrimination. It was also noted that the pay gap for part time women actually increased once characteristics were taken into account, implying they should have been paid more than men instead of 10% less.

This result is standard internationally too. Most studies find that human capital reasons explain little of the difference and that even taking differences in industry and occupation into account a large residual remains unexplained. This may be things that economists cannot measure or it could be discrimination. Other studies have found that even a year after leaving college women are already paid much less than men. As this is too soon for a difference in experience to emerge or for time to be lost due to children, this suggests it could be due to discrimination. The widespread nature of the pay gap also suggests discrimination. Women get paid less regardless of their level of education, their industry, occupation or even if they reach the level of CEO.

Differences in industry cannot explain the pay gap as women are paid less in almost every industry and occupation, including the male dominated ones. Studies also find that women are less likely to be hired, even for low level jobs. A study in Philadelphia used identical resumes to apply for waiter and waitress jobs but only changed the gender. It was found that women got only half as many job offers as the male candidates. Once hired, women are less likely to be promoted or reach high ranking positions. It was found that only 3-5% of senior managers in Fortune 1000 companies were women.

The thing about sexism is that it is everywhere and it has incredibly deep roots. It is rarely blatant and open but has a strong subliminal influence on men and women. What if the industry and occupation women end up in is subject to discrimination too? What if the reason there are so few female engineers isn’t because women choose to avoid such a well paid career, sexist influences mean women are made to feel they don’t belong on an engineering course? I have friends studying engineering and one thing they frequently comment on is how male dominated their course is and how isolated the women are. Likewise I knew a guy who studied nursing and everyone thought was “weird” for doing so. What if sexism is pushing women into low paid “feminine” jobs? What if women don’t choose low paid roles, but rather the jobs that women choose get low pay because women do them. No woman is an island and we are all influenced by the culture we live in.

The economic controls that economists add may end up covering up discrimination. What if our culture makes women seem unsuited to senior management roles? That would be discrimination, but hard to measure. Sexist hiring and promotion practices would not be picked up on in an econometric test. What about a situation where all the women were low paid nurses and all the men were high paid doctors? Would that be discrimination? Not if women can freely become doctors, but if there is a culture that frowns upon female doctors, then is that not a form of discrimination? Sexism is more likely to strike silently with a knife than to go about with all guns blazing. The barriers to success in life are rarely large and obvious, but it is far more likely to be the subtle invisible ones that hold us back.

Women lose out in their careers from having to take time out to raise their children, but is this a choice? If it is just expected that a good mother will sacrifice her career for her children while the father keeps working, is that really equality? It isn’t just through free choice that the vast majority of children are raised because their mothers took time off from work, but also through societal norms and cultures . Imagine if a father dropped out of work to raise a child while the mother kept working. The mother would have to deal with the accusation of being cold and uncaring (some of the worst insults to a woman) of her child while the husband would have to deal with the notion that he is weak (one of the worst insults to a man). The rarity of these reversed gender roles suggests its not an entirely free choice.

The gender gap is not as wide as the raw data suggests but it is still real and it is still significant. Women are paid roughly 10% less than men for reasons that cannot be adequately explained. This is highly likely to be due to discrimination and is probably an understatement as even the choices women make over which job and industries to work in are subject to social norms that discourage some occupations as not somewhere women belong. Sexism and gender divides are not just something that exist in history books or battles that our parents fought, but still a real and persistent problem. Equal pay for equal work still isn’t a reality.

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15 Comments

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15 responses to “The Gender Pay Gap Revisited

  1. Again, well written and well-documented. Unfortunately, here in the U.S. where things seem on the worse side, people are no long interested in facts. Once something plausible gets utter supporting their side, the blinders come out and nothing else gets seen.

    Get’s me Irish up, it does.

    • mikelets456

      So, telling a private business owner what to pay workers is “free market” principals? There are pay gaps everywhere in any society. If you want government controlling it to make it “fair” then it’s Marxism or let the free market along with citizens boycotting, etc and it will all shake out.

  2. I’m in my early 40′s, no kids, not having any. I work in a warehouse, and my manager keeps giving me ‘thinking’ jobs rather than muscle jobs. I was originally hired for a position that required a bit of both. I can’t say that any of the men I work with treat me like I’m weak – except for one 23-year-old who I’m gonna have to set right. But I am concerned that I might make less because my pay rate didn’t change from when I moved from the office job I used to have to the warehouse. I heard one of the lads -who has only been with the company 8 months to my 2 years – ask about the pay rise when being made full-time after the probationary period was over… and I think he’s getting more than me. I’m a bit hesitant to check as I’m gonna be raging…

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  4. Woman and man are not weighted equally in these valuations because they are comparing large groups and not subsets of groups….For example: A woman with equal qualifications and work experience (without breaks for childbearing) as a man earns more than the man of equivalent standing…Studies have shown this to be true for the last 30 years.

    In the US the Lilly Ledbetter act of 5 years ago was attempting to make equal pay for equal work law for women vs. men….when the market had been doing that for 30 years. If this law was attempting to help women because of sexism…it would actually harm them. See Friedman’s simple explanation:


    (https://rightfromyaad.wordpress.com/2013/03/09/international-womens-day-topic-a-case-against-equal-pay-for-equal-work/)

    Then your least favourite (and dunce) economist Thomas Sowell also dispelled this myth:

    The Wall Street Journal also made this evidence very clear in 2011: http://online.wsj.com/article/SB10001424052748704415104576250672504707048.html (https://rightfromyaad.wordpress.com/2013/03/09/international-womens-day-topic-dispelling-myths-of-higher-paid-men/)

    Of course all of this means nothing to individuals who politicize economics rather than looking at facts…..just snippet: Mary T. Barra (CEO, General Motors)/ Marissa Mayer (CEO, Yahoo)/ Sheryl Sandberg (COO, FB)….etc.

    • Did you even read the post or did you jump straight to the comments? Because I clearly went through the issue of different qualifications. I specifically pointed out that even when differences in qualifications are taken into account, women still earn 10% less.

      “A woman with equal qualifications and work experience (without breaks for childbearing) as a man earns more than the man of equivalent standing”

      So you’re saying there is a pay gap but it is in favour of women? I would love to see these studies you speak of.

      That Friedman video is the most ridiculous thing I’ve ever seen. Equal pay for equal work is apartheid? Unions used the claim of equal pay for equal work to create apartheid? What planet was this guy living on? How in the world is women getting paid less than men for the same job a weapon to fight sexism? This video is an embarrassment to Friedman.

      The Sowell video doesn’t have anything special in it, apart from his claim that ethnic groups are never exactly proportionally represented. He seems to miss the point that the main aim of parliament is to represent the nation.

      “Of course all of this means nothing to individuals who politicize economics rather than looking at facts…..just snippet: Mary T. Barra (CEO, General Motors)/ Marissa Mayer (CEO, Yahoo)/ Sheryl Sandberg (COO, FB)….etc.”

      I’m not sure what your point is here. By naming a handful of woman CEOs is this supposed to counter the claim that women are economically worse off? Are you not aware that the number of female CEOs is vastly smaller than the number of male CEOs?

      • Processing information critically, rather than emotionally is another problem with liberals….

        You want to compare apples and oranges…Gender and race proportionality in every sphere of life is a myth.

        Why aren’t there equal men in nursing and teaching as women; or women in the construction industry and mining as men. Why single out CEO’s of companies as an example of unequal representation of women?

        The example I used was of equally qualified women in similar positions earning more than men of equal stature…You are looking at entire groups rather than individuals. Compare an apple to another apple. Did you read the WSJ article? I will put it again for your perusal: http://online.wsj.com/news/articles/SB10001424052748704415104576250672504707048

        • “Processing information critically, rather than emotionally is another problem with liberals….”

          Oh come on, you’re sounding like a parody. Your side is full of the intelligent rational people, while everyone else is an idiot?

          “Why aren’t there equal men in nursing and teaching as women; or women in the construction industry and mining as men.”

          Probably because there is a culture against it. If women are pushed away from one industry then they will overfill the ones that are left open to them. Also, it should be noted that even in industries where women are predominant such as education and social work, they are still paid less than men.

          The article you link doesn’t do much to help your argument. It focuses on the fact that male unemployment is higher while glossing over the fact that labour force participation rate is much higher, therefore more men are in employment. It foolishly makes the claim that women “are willing to trade higher pay for other desirable job characteristics.” even though there is no evidence that they make this choice.

          It goes on to bring out silly stereotypes that men work in harder more dangerous jobs as though the wage gap is due to men working as lumberjacks. In reality the best jobs are in finance, law and medicine, jobs that a woman can do just as well as a man and don’t require hard physical labour or dangerous conditions.

          • My side…involves the promotion of individual liberty…the left and statists on the right love positive liberty and diminishing negative liberty in the process.

            This left v. right argument is actually farcical….we, meaning I and others who want prosperity for all, not equality, are anti-statists. Diminish the role of the state individuals’ lives. Statists are found on the “right”, but more dominant in the “left”.

            Why would you want govt control to give unto those without, by taking from those who have, through the institution of positive liberty and punitive measures if you aren’t part of the “program’ (as we say in Jamaica) is unreasonable and irrational.

            I have already told you that I am a physician….I love when you bring it up. That is my area of expertise. In my class of 103 students, males were 25% and women 75%. That has occurred not through positive liberty, but by negative liberty.

            Subsequently, the fraction of women going on into subspecialty surgery (a high paying prestigious disciplein) is drastically lower about 30%of the intake. Individuals make choices. It is out of choice that women do not enter surgery because of demands of surgical lifestyle, not discrimination.

            So, are we then going to impose restrictions on men entering surgery to allow more women to become surgeons? Or promote women in medical school on becoming surgeons? What is the effing point? (Pardon my french). For equality?

            • Ok you seem to have gotten this comment mixed up with your comments on my other post on the two types of freedom. You also seemed to have moved right past my last comment.

              Let me ask you one question. Do you believe people are islands? Do you believe we are unaffected by the culture and society around us and we can make decisions completely free of outside influence?

              • I have not mixed it up at all. I merged the concepts. So you now want to change culture to achieve equality? What is the point of doing that?

                Ok, your goal, I gather is that we now change the culture… in female dominated fields and likewise male dominated fields where both sexes can equally do the same job that has no physical requirements….to have equal proportions and then let them have the same pay.

                It is mind boggling how artificial that is. Back to Sowell, there is no field on Earth in any discipline, profession or industry, that achieves that “equality” or proportional representation for race, gender, age.

                Pardon me and my daftness, but individuals are not the sum totality of their gender/sex or their skin colour. They are the contents of their brains! So looking at outward phenotype is a poor way to achieve anything.

                • Next time you comment, can you please stop, reread my post and then reread my comment and then reply. At the moment you are listening to what I am saying and keep bringing up points as though I have never heard of them.

                  I never said we should have exactly proportional representation of race and gender. No one said that. You aren’t arguing against anyone. I said women should get paid the same (hence the title of the post). I’m not arguing for quotas.

                  Let me repeat myself yet again. Do you believe racism and sexism exists in the workplace or is every race and gender paid exactly in proportion to their work?

  5. Of course racism and sexism exists….but what we want is the state to be fair. Individuals discriminate everyday and you can’t stop that.

    In your article, you look at groups of women vs groups of men. That is not the best way to judge wage equality, and there are many reasons apart from gender that create these disparities.

    Let me get back to the Friedman example. If forced by law to pay the same wage, the sexist pig will not be punished by paying the woman the same as a man, he will just not hire her altogether. Freedom on other hand will allow individuals (women, blacks, gays, whoever) to seek employment at accept wages they deem appropriate for themselves, even with the sexist pig.
    Additionally, they (if they are as good as men, which we know and assume) will redound to the benefit of the employer who is not sexist/racist under the status quo, this would then drive the one who discriminates, for irrational reasons out of business. This is how freedom promotes equality and forces the bad eggs out of the marketplace, more than coercion by force of laws ever will. Laws will make it harder for those without jobs to get jobs…just as Unions impose minimum wage laws to keep competitive lower wage labourers at bay, equal wage laws for both sexes will bar women getting into the work place.

    What is this about if people are islands? I am not free of external influences at all. That is what shapes me as an individual. The big difference is that I cannot and do not want to force everyone into my concept of what is right and wrong in the decisions they make in their lives. That is the hubris of progressives and Keynesians….that one person or group of people in govt or in a state agency can make one rule or decision or policy to govern and dictate the way tens of millions or hundreds of millions of people run their lives or make choices. In my opinion that is immoral.

    • “In your article, you look at groups of women vs groups of men. That is not the best way to judge wage equality, and there are many reasons apart from gender that create these disparities.”

      You keep missing the point that even when these disparities are taken into account there is still a wage gap. Women still get paid less than men even once industry, occupation, experience etc is taken into account.

      “If forced by law to pay the same wage, the sexist pig will not be punished by paying the woman the same as a man, he will just not hire her altogether.”

      First of all the world is not divided into sexist pigs and the rest of us. Rather it is a question of degrees where people are subject to gender stereotypes sometimes without even knowing it. Second of all, it is not possible for most employers to just fire all their female staff. Some will have to stay on. Thirdly, laws act as an influence on social norms. Cultural preferences are not fixed, they are subject to change and laws can have a large effect in this regard. Laws can send a strong signal that sexist pay measures are unacceptable.

      “Freedom on other hand will allow individuals (women, blacks, gays, whoever) to seek employment at accept wages they deem appropriate for themselves, even with the sexist pig.”

      Where this fictional land where people can easily compare various job offers and chose the one with the wages and conditions that suit them best? I am currently job hunting myself and let me tell you that in the real world people accept the first offer they accept (unless it is truly awful). I have accepted job offers without knowing anything about the wages or conditions (its considered a bad tactic to ask such questions in an interview). In reality few people know what they are signing up for.

      “Additionally, they (if they are as good as men, which we know and assume) will redound to the benefit of the employer who is not sexist/racist under the status quo, this would then drive the one who discriminates, for irrational reasons out of business. This is how freedom promotes equality and forces the bad eggs out of the marketplace, more than coercion by force of laws ever will.”

      Tell me, did that ever happen? Was the 1950s completely free of racism and sexism in the workplace because all the racist and sexist firms went bankrupt? Or was it only with Civil Rights laws that we began approaching equality? The problem with the story of freedom saving the day is that it is a lovely story unsupported by history.

      “The big difference is that I cannot and do not want to force everyone into my concept of what is right and wrong in the decisions they make in their lives.”

      So as long as you are not affected, its fine with you. Tell me if a business instituted a “No Jamaicans wanted” sign would that be fine with you? Is that their freedom? Would the free market drive the business bankrupt or does that only happen for larger ethnicities? What if whole towns had No Jamaicans policies?

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