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Working women are paid less than working men. This primer examines the evidence surrounding the gender pay gap, both in the literature and through our own data analyses.
We will begin by explaining the different ways the gap is measured, and then go deeper into the data using hourly wages for our analyses, 1 culling from extensive national and regional surveys of wages, educational attainment, and occupational employment.
A number of figures are commonly used to describe the gender wage gap. One often-cited statistic comes from the Census Bureau, which looks at annual pay of full-time workers. By that measure, women are paid 80 cents for every dollar men are paid. Another measure looks at hourly pay and does not exclude part-time workers.
It finds that, relative to men, typical women are paid 83 cents on the dollar. The presence of alternative ways to measure the gap can create a misconception that data on the gender wage gap are unreliable.
However, the data on the gender wage gap are remarkably clear and unfortunately consistent about the scale of the gap. In simple terms, no matter how you measure it, there is a gap. And, different gaps answer different questions.
By discussing the data and the rationale behind these seemingly contradictory measures of the wage gap, we hope to improve the discourse around the gender wage gap. However, the adjusted gender wage gap really only narrows the analysis to the potential role of gender discrimination along one dimension: But this simple adjustment misses all of the potential differences in opportunities for men and women that affect and constrain the choices they make before they ever bargain with an employer over a wage.
While multivariate regression can be used to distill the role of discrimination in the narrowest sense, it cannot capture how discrimination affects differences in opportunity. In short, one should have a very precise question that he or she hopes to answer using the data on the wage differences between men and women workers. We hope to provide this careful thinking in the questions we address in this primer.
The gender pay gap is a fraught topic. Discussions about it would benefit greatly from a thorough review of the empirical evidence. The data can answer only precise questions, but the answers can help us work toward the broader questions. This paper aims to provide this precision in search of broader answers. By making the data publicly available and usable, we hope to advance constructive discussions of the gender pay gap. The gender wage gap is a measure of pay disparity between men and women.
While it can be measured different ways, the data are clear: This translates to 83 cents per dollar. The gender wage gap is a measure of what women are paid relative to men. This tells us how much a woman is paid for each dollar paid to a man.
In other words, for every dollar a man makes, a woman makes about 80 cents. The difference in earnings between men and women is also sometimes described in terms of how much less women make than men. To calculate this gap from the ratio as defined above, simply subtract the ratio from 1.
So, if the gender pay ratio is about 80 percent or 80 cents on the dollar , this means that women are paid 20 percent less or 20 cents less per dollar than men. We keep with this convention of using median wages of wage and salary workers rather than average wages of wage and salary workers because averages can be skewed by a handful of people making much more or much less than the rest of workers in a sample. However, we examine median wages on an hourly basis and include all workers reporting a positive number of work hours.
Or in common terms, women are paid 83 cents on the male dollar. It is important to understand why. The gender wage gap described above and referred to in this primer has the virtue of being clear and simple. But it does not tell us what the wage gap is between men and women doing similar work, and whether the size of the gap derives in part from differences in education levels, experience levels, and other characteristics of working men and women.
Adjusted wage gap estimates control for characteristics such as race and ethnicity, level of education, potential work experience, and geographic division. These estimate are made using average wages rather than median because it requires standard regression techniques. Again, using the Current Population Survey data from the CPS Outgoing Rotation Group, but making these adjustments, we find that the wage gap grows, with women on average paid Models that control for a much larger set of variables—such as occupation, industry, or work hours—are sometimes used to isolate the role of discrimination in setting wages for specific jobs and workers.
The notion is that if we can control for these factors, the wage gap will shrink, and what is left can be attributed to discrimination.
Think of a man and woman with identical education and years of experience working side-by-side in cubicles but who are paid different wages because of discriminatory pay-setting practices. We also run a model with more of these controls, and find that the wage gap shrinks slightly from the unadjusted measure, from For instance, Blau and Kahn find an unadjusted penalty of So it would not be accurate to assume that discrimination explains only the gender wage gap that remains after adjusting for education, occupational choice, and all these other factors.
Put another way, we cannot look at our adjusted model and say that discrimination explains at most And, as explained later, the gap may play a role in the retirement insecurity of older American women.
Over the past three and a half decades, substantial progress has been made to narrow the pay gap. After that, convergence slowed, and over the past two decades, it has stalled. In , they were equal to roughly By , they were equal to Davis and Gould At the same time, for most workers, wages no longer increased with increases in economy-wide productivity. Belonging to a certain race or age group does not immunize women from experiencing the gender wage gap. It affects women across the board, though higher-earning women and middle-age women are at a greater disadvantage relative to their male counterparts.
And relative to white male wages, black and Hispanic women are the most disadvantaged. The gender wage gap is a problem for women at every wage level. At each and every point in the wage distribution, men significantly out-earn women, although by different amounts, to be sure Figures B and C.
The minimum wage is partially responsible for this greater equality among the lowest earners. The gender wage gap is largest at the top of the wage distribution, with women at the 95th percentile getting paid Economist Claudia Goldin argues that women in high-wage professions experience a wider gender gap because they are penalized for not working long, inflexible hours Goldin It is interesting to note that the wage gap between median men and women workers has narrowed noticeably over the past four decades Hegewisch and DuMonthier At the low end, the gap has not closed as much, but the existence of the minimum wage likely kept wages of low-paid men and women closer together even in the s.
Relative wage gaps are larger for high-wage white and Asian women but black and Hispanic women are paid least relative to white men. Here higher-wage white and Asian women are paid the least relative to their male peers, i.
When we compare the wages of white women and women of color with wages of white men, white and Asian women fare better than their black and Hispanic counterparts Figure F. White non-Hispanic women are paid But the shares are much lower for black and Hispanic women, at Native-born workers of either gender are paid more per hour than non-naturalized foreign-born workers Figure G. However, non-naturalized foreign-born women—like their native-born counterparts—experience a wage gap that further reduces their earnings.
Among undocumented Mexican immigrants, the gender wage gap is wider: Includes individuals older than The category foreign born includes foreign-born individuals who are not citizens of the United States.
So while foreign-born workers overall are disadvantaged in terms of wages, non-naturalized foreign-born women are additionally disadvantaged by the gender wage gap. Compared with native-born men, the average foreign-born woman is paid Foreign-born naturalized workers not only earn higher wages than their non-naturalized and native-born counterparts, but have a slightly smaller gender wage gap.
The gender wage gap is quite small for workers in their teens and early 20s, but the gap grows with age Figure H. For typical working men, hourly wages rise until around the age of 45 and then plateau, but for typical working women, hourly wages top off earlier in the 35 to 44 age range. This holds true when measuring the gap using median weekly earnings of full-time wage and salary workers Hill Other research shows that from the beginning of their working lives, women experience a gender wage gap that is still expected to swell significantly over the course of their careers, regardless of education or work experience Goldin Rather than disproving the role of discrimination, work experience, hours, and schedules in part reflect the social expectations that still disadvantage women.
On average, women have less work experience than men, and this contributes to the gender wage gap. But it would not be correct to conclude that this helps disprove the role of discrimination, because the lack of experience itself is a function of social expectations and norms that disadvantage women in the workplace.
Women are more likely to temporarily exit the labor force—most often to raise children, although increasingly to care for an older relative—which leaves them with less work experience.
One study of workers with MBAs showed that a year after receiving the degree, only 4 percent of men had experienced a career interruption of six months or more, compared with 9 percent of women Goldin Further out from their schooling the gap grows: And in the 10 to 16 years following graduation with an MBA, 40 percent of women had experienced a career interruption.
Bertrand, Goldin, and Katz Women tend to work different hours than men, which affects their earnings. However, the story is different depending on wage level. Women are more likely than men to work low-wage jobs, and low-wage workers are more likely to experience irregular work schedules, such as irregular shift times or on-call shifts, than are other workers Golden ; Davis and Gould For low-wage parents especially, irregular schedules—often associated with pay that changes from paycheck to paycheck—can be paralyzing as they try to coordinate childcare and meet basic household needs.
Among higher-wage workers, firms tend to disproportionately reward those who work long and particular hours, and those individuals are more likely to be men, which creates a wider wage gap for higher-wage women Hersch and Stratton ; Goldin But when workers have more temporal flexibility—that is, more choice as to the schedules and number of hours they work—the gender gap narrows. In fact, Goldin finds that temporal in flexibility is an important contributor to the gender gap.
Women are also roughly twice as likely to work part time as men; The biggest disadvantage part-time workers face is their relatively lower rates of pay and benefits coverage relative to full-time workers.
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The Gassville City Council held its regular October meeting Tuesday night. Mayor Jeff Braim says the council got an update from Ken Cotter of Consolidated Land Services on the wastewater expansion project. The gender wage gap is a measure of what women are paid relative to men. It is commonly calculated by dividing women’s wages by men’s wages, and this ratio is often expressed as a percent, or in dollar terms. Online shopping from a great selection at Books Store.