Occupation, lifestyle choices affect wages more than gender




No observer of the presidential debates will have found the discussion about pay and gender satisfying.

At best it was stumbling; and, to be honest, I find much of the talk condescending toward women who make difficult career and family choices in full knowledge of the costs and benefits. In short, the matter needs some clarification.

With regard to the data, there’s little debate. The average working woman, in 2010, earned 81 percent of the average working man. Likewise, there’s no debate that the gap is closing, especially for younger women, for whom the current gap is less than 5 percent. These are the data, and by themselves offer no cause or understanding of the issue, much less an explanation of potential policy interventions. For that we need to analyze the data, a step much feared by demagogues.

Studies of the gender gap typically are performed using a statistical model that estimates how various factors, such as schooling, occupation, hours worked, age, time on the job, gender and unexplained factors predict wages. It should not be surprising that the majority of wage differences between men and women can be explained by schooling, occupational choice and experience.

Early studies showed that gender and unexplained factors explained about half the wage gap. We cannot measure discrimination, but this is a pretty good proxy. However, over time, the best research points to an evaporation of unexplained factors, and a small (perhaps 2 percent to 5 percent, sometimes zero) wage gap attributable to gender.

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