Equal pay statistics

As we know, women are paid less than men, and it’s not primarily because of sick-leave differences.   So what does cause it?  Motivated by current US legislation, the Washington Post digs out a 2007 research report that estimates how much of the difference can be statistically explained by factors such as choice of occupation and leaving the workforce to take care of children.

In a sense, this attempts to give a lower bound on the impact of discrimination —  some of the impact of childcare responsibilities is a hangover from traditional roles, but it’s quite possible that in a perfect world there would still be some gender differences in child care.  Similarly, some of the lower pay in majority-female occupations is probably because these occupations had more women, but it’s hard to say how much of it.

The reseachers, Francine Blau and Lawrence Kahn, looked at US data from 1979, 1989, and 1998 (the report was being prepared and revised for a long time). In 1979 the pay ratio was 63%, but comparing men and women with the same education and experience it was 71%, and additionally controlling for occupation, industry, and union coverage it was 82%.  In 1998 the numbers were 80%, 81%, and 91%.

So, by 1998 about 10% of the US pay difference between men and women was explainable by differences in education and experience, about half of it was explainable by working in different industries or occupations, and the rest was not explainable by anything they measured.    I don’t know if anyone has done a similar analysis for New Zealand, where the differential is quite a bit smaller than in the US.

This is an example of the sort of thing you can only do with good-quality survey data; in this case from the University of Michigan’s Panel Study of Income Dynamics.