Wednesday, April 15, 2009

Male-Female Pay Gap

The American Association of University Women (AAUW) has several useful reports on gender issues on their website. In this post, I summarize the findings of one report that examines the gender gap in pay for university graduates (2004-2006).

Women graduates working full-time earn only 80 % as much as their male counterparts at one year out of college. By ten years post-college, the gap has widened, with women earning only 69% of male salaries. This site has a map showing the earnings gap by state and for the entire US. The smallest earnings gap is in Maine where women’s earnings are 83% of male’s. The largest gap is in Louisiana where women’s earnings are 64% of male’s. There are no major differences in the proportion of women versus men with a four-year college degree.

Several factors influence the discrepancy in earnings by men and women. One is that female students are concentrated in fields with lower earnings: education, health, and psychology. Higher-paying fields (engineering, mathematics, and physical sciences) are dominated by males. But this does not entirely account for the pattern, since pay gaps occur for men and women with the same college major. For example, in biological sciences, which is a mixed-gender major, women earn 75% of what men earn. So choosing a high-paying major will help women close the pay gap, but other factors may prevent a woman from achieving similar earnings to males in the same field. One additional factor, time off for parenting, often leads to lower wages when the woman returns to the workforce (compared to those who are continuously employed). Other factors include a work ethic characterized by “masculine” values of competition and individual achievement. Those female (and male) workers who choose not to work long hours are often viewed negatively and do not advance at the same rate as those who do.

What about numbers of women versus men who graduated, attended “selective” schools, performed well academically, or earned a professional license or certificate? Turns out that more women than men graduated in 1999-2000 (57%). Men and women attended similar types of institutions, but of graduates working full-time, men were more likely to have attended “very selective” institutions (35% men to 28% women). Women outperformed men academically in all majors (GPA of 3.16 women vs. 3.04 for men overall), including science and mathematics. Women were more likely to have earned a professional license or certificate after graduation (34% vs. 28% men).

One interesting analysis was to identify discrimination by eliminating other explanations for the pay gap. The authors of this report used a regression analysis to control for different choices that men and women make. They basically asked the question: “If a man and a woman make the same choices, will they receive the same pay?”. The answer was no. After controlling for all other factors, they found that college educated women made about 5% less than their male counterparts.

In addition to the pay gap, male college graduates have greater flexibility, autonomy, and supervisory responsibilities in their jobs (after 10 years) than women counterparts. The unexplained portion of the gender gap also widens with time.

What can be done to reduce the gender gap? These are the suggestions from the report:
1. Integrate majors and occupations (eliminate gender segregation) by:
a. Promoting careers in science, technology, engineering, and mathematics in ways that are appealing to girls and women
b. Encourage women to negotiate for better quality jobs and pay
c. Encourage girls to take advanced courses in mathematics
2. Support mothers in the workplace
a. Encourage employers to offer high-quality part-time employment opportunities
b. Rethink using hours as the measure of productivity
c. Protect and extend the Family and Medical Leave Act
d. Increase women’s employment options by supporting high-quality child care in conjunction with other family-friendly policies
3. End gender discrimination
a. Individuals must take action at work (women should collect information and become advocates for themselves and other women)
b. Leaders in the workplace must embrace change
c. The public sector should be the model employer
d. Strengthen national legislation

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