3Qs: Gender pay equity makes slow progress

In honor of Women’s His­tory Month in March, the White House released a report last week on women’s status in America. Among other find­ings, the data show that women have sur­passed men in col­lege atten­dance, but income inequality between the sexes per­sists. William Dickens, dis­tin­guished pro­fessor of eco­nomics and social policy, who spe­cial­izes in labor mar­kets and wage deter­mi­na­tion, dis­cusses the per­sis­tent gap between men and women’s incomes.

Why does income inequality per­sist despite women’s gains in edu­ca­tion?
There are sev­eral fac­tors at work here. While the younger gen­er­a­tion of women today has more edu­ca­tion than men, there are still cohorts in the labor market from the time when women were less well edu­cated than men. So that brings down the overall average. Also, women are still less likely than men to be found in those col­lege majors — such as engi­neering and sci­ence — that lead to the highest salaries. It’s hard to sort out how much of this is due to women pre­fer­ring work in other areas, as opposed to how much is due to dis­crim­i­na­tion and hos­tile envi­ron­ments in these fields.
Once out of school, the same sorts of fac­tors come into play. Young women fre­quently take time off for child­birth and child­care. Men may take time off for child­care, but much less fre­quently than women. Con­se­quently, some employers may feel that an invest­ment in a young man is more likely to pay off than an invest­ment in the career of a young woman. How­ever, there’s clearly still dis­crim­i­na­tion and harass­ment that takes place in many work­places where women are under­rep­re­sented. These are often better paying jobs than others avail­able to those with the same level of education.

What can women do to increase their earning power?
Edu­ca­tion pays off at sim­ilar rates for men and women. Even if women get paid less at a spe­cific level of edu­ca­tion, their earn­ings increase about as much as men’s when they have more edu­ca­tion or more work expe­ri­ence. There is also some sug­ges­tion that women could be more assertive when it comes to advo­cating for them­selves. On average, men are more aggres­sive in bar­gaining for wages and pro­mo­tion, and that may explain some of the dif­fer­ence in pay.

Could the eco­nomic down­turn pose a threat for women in closing the salary gap?
In the short run, I can imagine it either slowing or accel­er­ating the clo­sure of the gap, because there are numerous dif­fer­ences in how the reces­sion is affecting men and women. How­ever in the long run, I doubt the reces­sion will make much dif­fer­ence. Bar­ring a retreat on norms encour­aging women to work, I see less and less resis­tance to women working in higher paying jobs. Also, women are finding them­selves more com­fort­able in those roles as the number of women doing such jobs increases.