Yesterday I declared that the feminisation of education was complete and we should all start worrying about other things now. I was, as I am wont to be, a tad hasty perhaps.

For there is something which still isn’t quite right. That is the occupational segregation in hte education system. It is indeed true that more degrees are awarded to women now than are to men, but it’s also true that the subjects studied can be wildly different.

As you can see, there are huge differences in what it is that men and women choose to study.

Now this doesn’t surprise us much around here. For the very basis of our EQSQ personality test is that there will indeed be such differences on average. Human minds are arrayed on a spectrum, from those interested in systems and processes (what we call “systemisers”) to those interested in other people (”empathisers”). Everyone has a little of both, of course, but we do find men clustered at the systemising end, women at the empathising. Do, please, note that this is about averages, not an individual. An individual can of course be anywhere upon that spectrum.

OK, so it’s also not too much of a stretch to think that these brain types might also influence job or career choice, right? It might be what it is that a certain brain type enjoys or it might be what it’s good at. But we can all accept the thought that certain people will be predisposed to certain activities….and that this split might not be equal between men and women.

Now to the extent that the choices in the chart above are made for such rational reasons we’re of course delighted. But there is something of a problem still.

I have no problem if women want to spend four years at college studying (at their own expense) the role of indigenous women in the postmodernist Marxist movement of 1960’s Paraguay, or whatever.  However, I do have a problem when these same folks later complain that their income is below average or they are under-represented in the board room.

College degrees most dominated by women include library science, consumer science, social science, education, language, psychology, and gender studies.  Top college degrees most dominated by men include construction trades, engineering tech, transportation, military technologies, engineering and computer science.

Sorry, but I cannot imagine any possible restructuring of society and the economy where the first list is more valuable and has higher income potential than the second list.

There’s part of the gender pay gap right there. In the subjects that men and women differentially decide to get their training in. And I agree, I cannot think of any method (short of a full blooded and bloody Marxist takeover) which would reorder society so that, say, librarians were paid more than computer engineers.

So we’re rather stuck at a little bit of an impass here. That people go and study what they want, what they’re suited for is great. But it does seem to be one of the things leading to the pay gap later on in working life.

I’m not sure there’s any solution here at all. It just depends upon which trade off you prefer I guess.

The future of work is female that is. OK, so these figures are from the UK and I’d expect the US to be about 10 years ahead of us, as you’ve pretty much always been on social matters.

Statistics compiled by The Sunday Telegraph reveal that women now provide half of recruits and trainees for what were once the traditionally male bastions of medicine, law and the church, while the proportion of women in professions like architecture and veterinary medicine is also rising sharply.

The phenomenon is thought to be the result of girls overtaking boys at school and university, greater expectations among women growing up in the post-feminist age and recruitment practices which encourage and even favour them.

This is something which I’ve touched on before and I think it’s worth reiterating my point again now that it’s becoming more generally acknowledged.

We know that we very much did have, in hte past, direct discrimination against women, in deed, in some countries we still do. For example, it wasn’t all that long ago that women were expected to leave the workforce when they married….certainly when they had children, as is still the caase in Japan today.

We’ve torn down a lot of (most of, all, to your taste) and we now see that college entrance, college degrees awarded and as above, entry into the traditionally high paying professions are now all female majority. About the only area of academia which isn’t female denominated is in the award of higher level degrees.

And yet we still see that women earn less on the dollar than men do: how can we reconcile this absence of discrimination with this outcome? There’s two effects at work here.

The first is that women still do, at least they do a great deal more than men do, drop out of the workforce for some time whilethey have and raise children. They might work part time, or decide not to take promotions, their raises that go with them and also the higher time committment necessary. Not so much a gender pay gap as amotherhood one….but it’s OK, we’ve gone through this enough here not to need to repeat ourselves again at length.

The second reason is I think the still underappreciated one. When we look at the gender pay gap we look at it across all age ranges. That’s what gets us our 79 cents on the $ number, for example. Now, if we did indeed have discrimination in the past and don’t now, then we’d expect that some age group which was discriminated against, would have a lower income, a smaller set of chances, than those now not being discriminated against.

For example, those at the end of their working lives now would have been in their last year or two of high school in 1960. Do we think that there was gender discrimination then in education, in the careers and professional opportunities? Umm, yes, I think we pretty much do think so.

Do we think there still was in 1970? 1980? I’d be surprised if anyone thought that we’d got rid of that “men do these things, women those” before what, say, 1990? So we’re really only seeing the effects of the absence of (this sort of) gender discrimination amongst those who are under about 35 to 40.

Which leads us to an interesting conclusion. OK, we still might want to look at the Mommy discrimination (although since much of it seems to be driven by Mommies’ choices, perhaps we don’t) but it’s certainly possible that direct discrimination is over. Whatever it was that we needed to do we’ve already done. Women are the majority of entrants into these professions now and all we need to do is wait a generation so that they are similarly represented at the top and we’re done.

Which is cheering news, isn’t it? Another problem solved, done and dusted.

For all the complaints we hear about the structural inequality of our patriarchal society, it is true that equality continues to advance.

Now to understand this you’ll need to grasp something about the British legal system. Firstly, that it’sactually teo systems, one for England and Wales and another for Scotland. Secondly, that we have two different types of lawyers. While the differences are slightly fading away, there’s still a distinction made between solicitors and barristers. Solicitors are the people that do the office work. Wills, property transfers, all that sort of stuff. They also do the office work of preparing a case for a trial. Then they hand over to the barristers who do the actual getting up on their hind legs and talking in court bit.

Slightly odd I agree, but it does allow people to specialise.

Now, for solicitors the intake has been majority female for well over a decade now.  For barristers not so much. Actually, they’re called advocates in Scotland but it’s the same thing, the talking in court bit.

…the Faculty of Advocates passes a significant milestone next week with the arrival, for the first time, of as many female trainees as male ones.

Over the previous 20 years, the ratio of “intrants” starting their nine-month training at the Bar has generally been three or four males to every female. One year in the early 1990s, the intake was 19 men and one woman.

The percentage of women joining more recently has varied between 35 and 40 per cent. This autumn’s intake, however, is a near 50-50 split.

It may take some time for the equality in numbers to filter through to the top. The Scottish Bar is small, with 462 practising members of whom 110 - or 23 per cent - are women. Amongst the 96 silks, or QCs, the percentage of women is only 16 per cent.

(Just to add more detail, silks are the senior lawyers.)

Now this reflects on of my favourite contentions. It’s no good looking at the earnings of all women, or the number of women at the top of a prfession, or even the number of women in total in a career or profession. For we know that in years gone by there was indeed discrimination against women. When we try to work out what needs to be done about equality we need to look at it all by age cohort.

Are wages for women in their 20s the same as mens’? Actually, umm, yes, they are. Are there roughly equal numbers of men and women entering the traditionally highly paid professions? As above, yes, there are.

So it would seem that, at least in part, we’ve already done the heavy lifting required to make access to professional careers equal. We now have to simply wait for the current generation to work their way through the system and we’ll have solved it all, yes?

Well, no, not quite. For we’ve still got this career break for motherhood thing to contend with.

But it is still true to say that equality advances: in many, if not most areas of life, we have at least got to the equality of opportunity stage for both men and women. Perhaps not yet perfect but better than it was, no?

This is a really interesting paper about the management gender gap. Instead of trying to work it all out from first principles they’ve gone looking (rather like Levitt in Freakonomics) for a data set that will let them test different possible explanations for why there are more men in top management than there are women.

Women are under-represented in top management positions on both sides of the Atlantic. The academic literature suggests a number of explanations for this underrepresentation, including self-selection, investment in family and child bearing, lower female human capital investment, or gender discrimination.

OK, that’s a pretty good reading of the usual expanations. Their postulate is that:

A new strand of research considers another hypothesis – that the sexes perform differently under competitive pressures, even if these differences do not exist in non-competitive settings.

Now that makes sense to me to begin with: I’ve seen often enough (and complained about it) that girls do better when education is based around coursework, boys when it is all about exams. Indeed, that’s been hte justification for the swing from purely judging grades on competitive examinations to coursework over recent decades. So we all pretty much agree that it works at the lower levels of education.

The authors of the paper look at the entrance exams to one of the extremely competitive French graduate schools (fewer than 10% of applicants get in, but those who do rise to the very top of French society).

A gender gap in entrance exams

On average, men perform slightly better than women in both the written and oral exams despite evidence the female candidates are ‘better’ in the sense that:

• in the same cohort of candidates, the females performed significantly better than men in the national baccalauréat exam two years prior to the sitting of the HEC admission exam; and
• among the sub-sample of candidates admitted to the school, females outperform the males during the first year of their core curriculum classes at HEC.

Male performance has greater variance

The male performance distribution has greater variance – in the top quartile of examinees, men outperform women, while their written exam scores in the lowest quartile are worse than women. Female candidates’ performance is more concentrated around the median. Since only a small fraction of the initial candidates are admitted to the school, men are more likely to be admitted than women, even though roughly equal numbers of men and women apply.

Now that is interesting, don’t you think? We’ve got that higher male variance thing which is what got Larry Summers into so much trouble at Harvard. And we’ve got the point that in competitive exams, men do better than women. That is, better than their performance in non-competitive tests.

Given that getting into top management is much more like a competitive exam than it is like a non-competitive one (there can be only one CEO for example) we might indeed have our explanation for why there are more men than women in those sorts of jobs.

If you’re a fan of evolutionary psychology you might want to extend this a little too. Most women who are physically capable of having children and want them have, over the history of the species, done so. This isn’t true of men at all. Indeed, it’s said that 40% of men who’ve ever lived had no offspring. So, in evolutionary terms, men are indeed in a much more competitive environment than women are.

Which leads rather to a reductio ad absurdam. The reason there’s more men in higher management is because, well, they’re men.

There’s a great piece here at Huffington Post on occupational segregation. Not so much in the sense that I agree with the writer’s take on the subject, but rather at the data presented. Take a look. (I’ll not steal his charts from him.)

Women’s jobs happen to be mostly about care work: health care, childcare, and interpersonal relations - and they pay less than men’s jobs, which are blue-collar jobs or positions of authority, and pay more.

Leaving aside the pay part for a moment we around here would offer a reason for that concentration in the “caring industries”. As you know, we’re believers in the theory that people are placed upon a spectrum, from systemisers to empathisers: and we expect there to be more women at the empathising end of the spectrum than men and vice versa for systemisers.

So we’re absolutely not surprised that there are more women than men in the caring professions.

Moving back to the pay differences. An economist would simply point out that jobs which are more productive will pay higher wages. It might be that jobs in the caring professions are indeed less productive or, more likely to my mind, that they’re regarded as having other than monetary compensations.

I do think our Mr. Cohen here is playing a little fast and loose with the statistics though.

Some of these differences could reflect the cold hard facts of biology, women’s choices, strength differences, and so on: but nurse aides and truck drivers require the same amount of education and strength, and trick drivers earn 40% more - that’s almost 4 million workers in those two occupations alone.

The gold standard on jobs in the US and their pay rates and other statistics is the Bureau of Labour Statistics. Here’s their page on truck drivers and here’s the one on nurse aides.

You’ll note that the higher paid truck drivers are those doing the long distance jobs. These require a number of years experience, the possession of a licence and, more to the point, some fairly unpleasant side effects of the job: like being away from home for large parts of the year. If you look at the pay rates for people driving trucks on local deliveries, without those licence requirements and long distance travel, you’ll see that wage rates are just about the same as they are for nurse aides.

Indeed, when we look deeper, we see that median hourly for nurse aides is $10.67, and while long distance drivers get $16.85, local get $12.17 and drivers/sales people get $9.99.

I don’t think the pay statistics are saying quite what Mr. Cohen says they are saying. Do you?

Thomas Sowell is something of a bugbear for a certain type of political activist. He’s a conservative (or as I would probably call him in my transatlantic manner, a classically liberal) economist who is also black. There really is a certain mindset that thinks that anyone with enhanced melanin must therefore be liberal in the more modern American sense. Sowell is a standing rebuke to such. Here he is on the subject of the gender pay gap:

We’ve frequently heard, and will hear much more I am sure if Hillary is the Democratic nominee, that women make 76 cents for every dollar a man makes. Can you give us a basic rundown of why that discrepancy exists?

There are lots of reasons. Men and women do not work the same number of hours. They do not work in the same occupations. They do not work continuously the same, and so on.

You know, if it was really true that you could hire a woman for three quarters of what you could hire a man with exactly the same qualifications, then employers would be crazy not to hire all women. It would be insane to hire men. Not only would it be insane, it would probably put them out of the business because the ones that were smart enough to hire women would have such a cost advantage that it would be really hard for the others to compete.

There are lots of gross differences between men and women and other groups and some of them shocked me when I first started doing the research. For example, I found that young male doctors make considerably more than young female doctors. But, when I dug into it a little deeper, I discovered that young male doctors work an average of 500 hours a year more than young female doctors. Obviously, a doctor that works 500 extra hours is going to make more money than the other doctor.

OK, now this isn’t exactly news to us here. We know that a large part (it’s not in fact whether it’s a large part of it explained this way, the argument is really about whether it’s only a large part of all of it) of the gender pay gap is explained by hte career interruptions that women (tend to) take in order to have and raise children. That plus the reasons above might in fact explain it all. But there’s been an interesting comment at another blog, Lattenomics, looking at the same piece.

In the comments one person says:

I think that is completely ridiculous. Women should get as much money starting out as a man does regardless whether or not she does or does not have children, or any other factor. The thing that should count is that she can do the exact same job as well as a man and that is what they should get paid based upon.

As our Lattenomicist points out,  the second sentence is of course correct. An individual who can do a job as well as anyone else is indeed both morally and in law due equal payment. But of course here we’re talking about averages and while many women are indeed paid exactly the same as the men with whom they work and or compete, some women do indeed work shorter hours, have indeed dropped out of the working world for a year or two to have a child and so on. So when the effects of their lower wages are taken into account it looks as if all women are discriminated against: which isn’t in fact the truth.

There’s also one more point that needs to be made. Let’s say that no women drop out of the job market before they are 30 in order to bear a child and that all men and women enter the job market at 22, equally qualified. We’ll even insist that all work the same hours and are all equally good at the work itself (yes, I know grossly unreal and unprepresentative of the outside world, but models are simplifications used to highlight a specific point).

We’ll also say that 80% of those women will, at some point between 30 and 40 years of age drop out of the workforce for a year each time to have a child (that percentage of women who have children is about right, the maternity leave part is more European than US).

What would we expect the effects on womens’ wages to be? Clearly, in the age group over 40 we would expect (if it is this dropping out that causes the pay gap) the wages of those 80% to be lower than the 20% of women who didn’t and of the men. But that’s not all, not by a long shot.

The wages paid to people in the 22 to 30 ages are not purely and solely for the work they do in those years. Some part of it is about the work they might do in the future: what will they develop into? And it’s this that will mean that womens’ wages will be lower than mens’ in this situation. For there is a 4 in 5 risk that the employer will lose some of those more productive years that he is paying for now. More, knowing that he faces this high risk (and add in the fact that many women in fact change to a lower hours job when they have young children) he’ll spend less on training that young woman in those years.

In short, the fact that women might tend to take a career break in the future will lead to their earning lower wages now.

Yes, we’ve all heard the line, there’s lies, damned lies and then statistics. The power of it as an observation about the world is that by picking and choosing the numbers you quote you can prove just about anything that you want: which is why when people present us with carefully chosen numbers we need to be so wary.

For example, in the US the gender pay gap is normally stated as women earning 79 cents (or whatever the number is) for every dollar earned by men. Now while it’s true, it’s not actually very informative. For, for example, do men and women work the same number of hours? No, they don’t, not on average, they tend to have shorter work weeks and in common with their sisters around the world they also tend to take more time off for illness.

No, of course that is not all of that 21 cent gap, but it is some of it, which is why that particular statistic isn’t really all that useful to us in deciding firstly, whether this is a problem we want to do something about and secondly, what we might do.

One such number that caught my eye this week was from an MEP (a Member of the Euuropen Parliament and thus one of those with power in Europe):

And how has it come to be that the UK has the largest gender pay gap in the European Union?

Now I expect politicians to be ill informed but that’s ludicrous. As the figures from her own organisation show, the UK’s gender pay gap is actually below average for the European countries, a very far cry from being the worst.

So what is happening? She’s quoting from these other figures, which do indeed seem to show the UK has the largest gender pay gap in Europe. How can we have both a below average and the largest gap in the same country at the same time?

The answer is in which actual figures are being looked at. The first figures are made up of only people who are working full time (the numbers accord very well with those you can work out by looking at average hourly pay).

The second set of figures come from looking at all of those in work. Which, as you might imagine, includes those who work part time.

And this is where the problem comes in. Those who work part time get paid less per hour than those who work full time. This is true in every country, it’s true of both men and women. Work part time and you’ll get less per hour than your full time contemporaries.

Add this together with the fact that we have a very different structure of employment in the UK than they do in other European countries and that’s where the difference comes from. For the UK has many more women working part time than the others. This is normally though of as something beneficial: those women who want to can find part time work which allows them to have and raise their children, rather than being forced into either full time work or none. But when you look at the average pay rates of men and women you’ll then be including both the effect of the gender pay gap and the part time pay gap.

Which is what allows a politician to say that a country which has a below average pay gap actually has the largest one.

See, you can prove anything with statistics.

No, this is really quite a clever idea: very much killing two birds with one stone type of clever thinking. So let us take two of our current societal problems.

The first is the Mommy Track and that way that it feeds through into the gender pay gap. We know from previous looks at this that when (if, but the problem applies in a less serious form to those who might in the future) women take a career break to have and possibly to raise children, it’s very difficult for them to get that career back afterwards. Part of it is simply less experience than those who didn’t take the break, part of it is the continuing desire for greater flexibility (and possibly shorter hours) that having children creates. There was most certainly also direct discrimination in earlier decades: how much of this remains appears nowadays to be more of a polticial question than an empirical one.

But as we know, it is this motherhood gap which is responsible (again in larger or smaller part to taste) for the difference in average wages between men and women. There’s also research showing that women who do take part time jobs, in order to have the flexibility they desire, don’t work at the same high-powered level they did before they took the break and had children: so there’s education and training, human capital in the jargon, going unused, something which makes us all poorer.

OK, that’s problem one. Problem two is that we can clearly see that regulation of financial markets and the banking system has been wanting. It’s not so much the external regulation which is wanting though: at least, not in my rather free market opinion. It’s the internal regulation, of the banks and finance houses themselves: it’s entirely obvious that all too many managements didn’t understand what it was that their own employees were doing.

So, Yves Smith at Naked Capitalism makes the suggestion that the banks create a Mommy Track all of their own. Not like the standard one, not at all. Rather, as a way to make the best use of those valuable skills, as a way to use all of that expensively trained human capital, while those mothers desire to have perhaps part time or at least not the brutal 70 hour banking work weeks.

Offer the mothers the chance to be the internal regulators while they are raising their small children. This keeps them in the marketplace, keeps their contacts and knowledge fresh, while allowing them to raise the next generation. It also provides a pool of experienced labor to do that oh so needed regulating: and as an added extra bonus it’ll, in banking at least, help to close the gender pay gap.

Women who’ve performed well in the City or the Street often find it impossible to work out part-time positions when they want to have children, except in those rare admin jobs that require substantive knowledge. You can get good women on the cheap with well-designed mommie track roles. Regulators should sit up and take notice.

An excellent and seriously good idea: not that this means anyone will take any notice, of course, even if they should.

This is a slightly out of date book, “Creating a Life, Professional Women and the Quest for Children” but it seems to have bounced back up again into the blogs recently.

Here’s Bryan Caplan on it, an older piece from Prospect about it and the Falkenblog. I tend to side with economic arguments rather than the feminist ones, but then I pretty much always do side with the economic arguments.

Essentially, I don’t think it’s any surprise at all that women who have great success in a career or professional life tend to have fewer (or no) children than those who have directed their attentions somewhat less to said careers. It seems blindingly obvious that one cannot do everything in this life and that concentration on one matter or another is going to mean that other opportunities slip one by. We do live in a society where to get to the top you have to work both very hard and very long hours: whether we’d like it to be this way or not is another matter, as is what we might do if we want to change it. But given that this is so I simply cannot summon up even any wonder, let alone surprise, at the idea that those who have taken one path have by doing so given up other options.

After all, we do know that this whole scenario is (one of) the causes of the gender pay gap. Those women who do have children tend to drop out of the workforce for a few years, often only coming back part time until the children are older. While there are those that complain, it’s not difficult to understand that this makes scaling the very peaks of a professional career somewhat difficult. I simply can’t raise that wonder at the idea that those who do scale those dizzy heights are the ones who have not so dropped out.

Two sides of the same coin really.

An interesting piece here concerning monopsony in labor markets. OK, let’s revise that “interesting” to carry a specific meaning: of interest to political and economic geeks like myself. But it does have wider implications.

The literal meaning of monopsony is “one buyer” (just as the literal meaning of monopoly is “one seller”). In the context of labor markets, monopsony means one buyer of labor, that is, one employer. But that’s confusing, because these days when economists use the term in the context of labor markets they usually don’t mean one employer.
Here’s what they do mean: in the standard labor market model, known as the perfect competition model, the market as a whole — that is, the supply of labor (all workers seeking a job) and the demand for labor (all jobs being offered by all firms) — determines the wage. The market-clearing wage occurs at that point where labor supply equals labor demand.

Moreover, in the perfect competition model, no single firm has the power to determine the wage; it simply accepts the wage that the market as a whole has determined, and that is what it offers to its workers. In this model, workers are extremely wage-sensitive, so much so that if any single firm cuts wages by even one cent, all the workers at that firm will immediately quit and find employment elsewhere.

In the monopsony model, however, the theory is that the employer has what is known as “market power,” and therefore is not a “wage-taker” (i.e., doesn’t have to offer the market wage). In this model, it is assumed that it’s the employer, not the market, which sets the wage. Therefore, in the monopsony case, the employer will offer below-market wages. And moreover, it’s assumed that the source of the firm’s market power are forces that bind an employee to an employer, so that if wages were cut, at least some of the employees would stay.

As is further explained, this has interesting implications for the gender pay gap. One of the reasons that the firm might have this pricing power is that it offers other, more intangible benefits: time off to care for children perhaps, or part time working, flexible working. And there are studies which show that women value these things more than men and thus that firms hold greater pricing power of the wages of their female workers than they do over men.

This can lead to people arguing (as is indeed done here) that the existence of such monopsonistic power means that greater intervention in the labor markets can be justified: both on equity and efficiency grounds. One example is as discussed here, that perhaps decent day or child care should be made a component of all jobs?

It’s an interesting argument, as far as it goes, but I’m not sure that it actually goes far enough. I don’t think there’s anybody who really believes the model of pure free markets in labor: nor do I think there’s anyone who would argue that there isn’t at least some monopsony power as described here. However, what we really want to know is which model is closer to the truth: models are, after all simplifications to aid us in understanding something complex. I tend to the free markets side, others might not.

But I’m really not certain that even that is the important point. It is, rather, that this allegation (description? accusation?) of monopsony power is I think missing the crucial distinction. From the point of view of the employer, these women friendly policies are not distinct from the wages of the labor being employed: they are very much part and parcel of them. Flexible working, child care, health care, part time jobs, all cost the employer money to provide. That if they spend more on such things then they will pay less in actual cash for the labor seems to me to be obvious. And that women who prefer these benefits to higher cash wages are in fact earning the same amount as the men who prefer the higher cash and fewer benefits. So while we have an apparent monopsony here, the firm with power over labor, I don’t think that we actually do. It’s simply that, in this example, we are assuming that men and women desire a different mixture of rewards for ther time and expertise, while the total reward is equal.

The error comes in from only considering the cash side of the compensation, rather than the total costs and benefits received.

What this then means for the political action is that insisting that the compensation be structured in a “woman friendly” manner is both unfair in equity terms and a bad idea in efficiency terms.

In equity, because the unmarried and or childless will be forced to accept part of their compensation in a form that they do not desire: those child friendly or child care policies, rather than the cash to spend as they wish they would prefer. Further, in efficiency, because it is efficient for both workers and employers to decide upon the mix of compensation offered and accepted.

As you might have gathered by now, I’m not entirely sold on this idea that we have either imperfectly operating labor markets and given that, I’m certainly not sold on the idea that we need to fix them.