What’s the real gender pay gap?

https://www.washingtonpost.com/opinions/whats-the-real-gender-pay-gap/2016/04/24/314a90ee-08a1-11e6-bdcb-0133da18418d_story.html

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The gender pay gap is back in the news — and it may become a major issue in the presidential campaign. It seems an open-and-shut case of job discrimination. Women earn only 79 percent of men’s average hourly wages. Who could favor that? Actually, the comparison is bogus. A more accurate ratio, after adjusting for differences in gender employment patterns, is closer to 92 percent. Even the remaining gap of 8 percentage points may not stem fully from discrimination.

What’s worth recalling (especially for anyone under 40) is that the flood tide of women into the labor force represents one of the great social and economic upheavals of the post-World War II era. In the early postwar years, gender roles were stark. Once women married, they mostly stayed home and took care of the kids. In 1947, women’s labor-force participation rate was 32 percent. Female college graduates were a tiny minority, and few women were doctors, lawyers, accountants, newspaper reporters, police officers or business managers.

This world is unrecognizable today. By 2013, women’s labor-force participation rate had nearly doubled to 57 percent. Women also earned 57 percent of the bachelor’s degrees in 2011 and half the PhDs and first professional degrees. Women’s entry into some occupations has been huge. In 2014, there were 251,000 female lawyers (34 percent of the total), 284,000 doctors (37 percent) and 134,000 marketing analysts (61 percent), reports the Labor Department.

The vast transformation had many sources: the spread of household appliances (washers, dryers, dishwashers, microwave ovens), which saved time; the advent of the birth control pill, which made it easier for couples to plan pregnancies; the opening of college to more women, which expanded job opportunities; and the rise of feminism, which challenged prevailing stereotypes.

Of course, not all conflict has vanished. There has been resistance from some male-dominated job bastions. Similarly, companies that don’t modify employment practices court discrimination. The gender pay gap is often taken as evidence of this. But the real story is more complicated, as a recent paper by Cornell University economists Francine Blau and Lawrence Kahn shows. (Note: Blau and Kahn are married; also, much of the data in this column comes from their study.)

For starters, the gender wage gap has narrowed significantly. Until the late 1970s, it hovered around 60 percent or a little less. Now, it’s that oft-quoted figure of 79 percent. As women move into more occupations and stay longer on the job, their wages are becoming more like men’s.

Still, if women were paid a fifth less for doing the same work as men, there would be pervasive discrimination. That’s how the pay gap is interpreted by many. They demand “equal pay for equal work.” But that’s not what the pay gap shows. It’s simply the ratio of women’s average hourly pay to men’s average hourly pay. The jobs in the comparison are not the same, and when these differences are taken into account, the ratio of women’s pay to men’s rises to almost 92 percent from 79 percent, say Blau and Kahn.

Specifically, they identify two major differences between women’s and men’s employment patterns. First, despite advances, women remain more concentrated than men in lower-paying industries and occupations. They work disproportionately as health-care aides, receptionists, cashiers and food servers. This drags down women’s average wages. The second big difference is that women still have slightly less on-the-job experience than men. This, too, lowers their average wages.

After all the adjustments, the remaining 8-percentage-point unexplained gender gap could reflect discrimination, write Blau and Kahn, pointing to academic studies. In one, when five symphony orchestras shifted to blind auditions, with candidates’ identities unknown, women’s success rates shot up. In another study, men and women with similar résumés applied for waitstaff jobs at high-priced restaurants; women’s job offers were 50 percent lower than men’s.

But the persisting gap could have other causes. There’s “the motherhood wage penalty”: Women bear the greatest responsibilities for child-rearing. Careers are interrupted; even when employers allow greater job flexibility, incomes and advancement prospects suffer.

Men can continue climbing career ladders, while many women are stalled or stopped. That’s one reason wage gaps between men and women are greatest among the best-paid workers, say Blau and Kahn. It also helps explain why there are so few female chief executives: about 4 percent of Fortune 500 firms employ them. On the other hand, the pleasures and duties of being a parent often dwarf on-the-job rewards. Either way, hard economic and emotional choices often can’t be avoided.

Women’s entrance into the labor force has created new issues: the work-family balance; sexual tensions at work; lingering discrimination; the debate over family leave and affordable day care. But we shouldn’t exaggerate these difficulties. On the whole, this historic transformation has gone remarkably smoothly.