Details in BLS report suggest that earnings differentials by gender can be explained by age, marital status, children, hours worked

NewImageMany of us have argued that the reason for the wage “gap” between men and women is because many women leave the workplace to raise a family, or work part-time, or have different educational backgrounds and credentials. 

When the BLS reports that women working full-time in 2016 earned 81.9% of what men earned working full-time, that is very much different from saying that women earned 81.9% of what men earned for doing exactly the same work while working the exact same number of hours in the same occupation, with exactly the same educational background and exactly the same years of continuous, uninterrupted work experience. As shown above, once we start controlling individually for the many relevant factors that affect earnings, e.g. hours worked, age, marital status, and having children, most of the raw earnings differential disappears. In a more comprehensive study that controlled for all of the relevant variables simultaneously, we would likely find that those variables would account for nearly 100% of the unadjusted, raw earnings differential of 18.1% for women’s earnings compared to men as reported by the BLS. Discrimination, to the extent that it does exist, would likely account for a very small portion of the raw 18.1% gender earnings gap.

 Language and words can be important. And that’s why I think it’s important and more accurate to refer to a “gender earnings gap” rather than a “gender pay gap.” Note that the NCPE uses the terms “gender wage gap” and “wage gap” 12 times on just the Q&A page of its website and more than 20 times on its main website. The Department of Labor study also used the term “raw wage gap.” The underlying assumption with that language (“gender wage gap”) is that there is one hourly (or weekly or monthly) wage paid to men and a lower hourly (or weekly or monthly) wage paid to women working side-by-side their male counterparts doing the exact same job when both have the exact same educational and work backgrounds, etc. Switching to using the term “gender earnings gap” broadens the concept of earnings differentials by gender, and more accurately allows for the reality that women are usually making the same hourly (or weekly) wage as men doing the exact same job. But men often “earn” more on average than women because men are working longer hours on average, performing different jobs than women, working in jobs that are physically more rigorous (construction), working in jobs that are more dangerous (logging) and in more hostile work environments (oil rigs workers), involve longer commute times and may be less flexible and less family friendly. So can we completely scrap the term “gender wage gap” and replace it with the more accurate “gender earnings gap”?

Via Economist Mark J. Perry

Perry cites the following 2009 study from the Department of Labor (“An Analysis of Reasons for the Disparity in Wages Between Men and Women”):

This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.