Gender and Wages - 5/5/14

May 5, 2014

Virtually everyone knows that men earn more than women on average.  The question is why.  Some theorize that a primary reason is that women disproportionately self-select into lower wage occupations like social work while men are more likely to enter highly compensated fields such as engineering.  But there are data indicating that that theory is insufficient to explain gender-based income gaps.

According to data from Claudia Goldin, a Harvard University labor economist, a majority of the pay gap between men and women actually comes from differences within occupations, not between them. Female financial specialists only earn 66% of their male counterparts.  Female podiatrists only earn 67% as much as their male counterparts and female aircraft pilots only 71% as much.  Among economists, the corresponding proportion is 82 percent. 

The wage gap persists even in occupational categories that women dominate.  Women nurses earn 89 percent of their male counterparts.  Goldin believes that these gaps are largely a function of employers who that a larger factor is that firms tend to offer higher compensation to workers who do not require flexible schedules.