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Archive for the ‘Gender Pay Gap’

Why Monogamy?

April 10, 2008 By: Tim Worstall Category: Gender Differences, Gender Pay Gap, Higher Education, Pop Culture 3 Comments →

Why monogamy? There have been plenty of societies (there still are some) which are polygynous (many wives for some men, none for others) and while there are indeed still places which are polyandrous (several husbands, one wife) they’ve been markedly more uncommon.

The first and most obvious explanation might be to do with lower violence and modern medicine. We can imagine societies in which men get killed in far greater numbers than women: highly warlike societies, for example. And there’s good evidence that hunter gatherer societies are indeed so highly violent (some research shows that being a male member of certain modern hunter gatherer tribes leads to a lifetime risk of death by murder of 30-40%….higher than inner city drug dealers face!) that there will be a shortage of men: thus polygamy.

It’s also possible to postulate that given the very high death rate of women in childbirth a possible shortage of women might arise, leading to polyandry. Although where it is seen it’s normally in the poorer echelons of a society that demands dowrys for daughters who marry.

But why is it that, barring a certain few small sects, modern societies are all monogamous: at least, serially monogamous in marriage (there’s always a certain amount of bed hopping going on, of course)?

The answer seems to be in the relative economic value or status of men and women. But no, not men being of high status, women of low, but of the variations in status amongst men and amongst women.

The paper is here and an explanation from Marginal Revolution.

Economic growth means that some women have higher human capital than others and thus they are better suited at producing and rearing high quality children. Wealthy men with lots of human capital will start to bid for these women and they will have to offer them exclusive status; these men also wish to invest in a smaller number of higher quality children.

In other words, male inequality encourages polygamy while female inequality discourages it. Apparently female inequality has been winning that race.

While I’m sure this is correct it rather amuses me in a way. Because higher human capital is another way of describing, in our modern economy, more tertiary or post-secondary education. And we’ve been rather bombarded with stories about how with women now getting a majority of the degrees, how some of them are going to have to marry down, to less educated men, in order to find that desired husband.

That doesn’t invalidate the finding of course: marrying someone with a lower educational attainment than oneself is still consistent with marrying the one with the highest human capital that is actually available. The best of the available pool would still make the mechanism work, that men have to offer exclusivity to gain the women with the highest human capital.

(For those wondering how the mechanism works, it’s like this. Men can have many children, far more than women can, by having many wives. The number of husbands does not determine how many children a women can have: that uterus gets used, along with the associated feeding bits, for some two years per child. The male physical investment is a few minutes: well, more amongst the proficient. Thus the desire for the woman is to be the only (and we are talking purely in biological terms here, not emotional or moral) one whose children the economic resources of the male is being spent upon: for the male, having a greater number of children might outdo the effects of the concentration of his resources. Thus the pressure that the more desirable women are able to bring to bear to enforce exclusivity.)

So even now women are gaining higher human capital than men, that male fantasy of the harem seems to be ever further out of reach.

Unless, of course, one looks to the lower echelons of the society, where children do rather to be sprayed around with rather more abandon.

Women Discriminate More Than Men

March 26, 2008 By: Tim Worstall Category: Gender Differences, Gender Pay Gap 3 Comments →

Well, yes, I think we already knew that, didn’t we? Women are indeed more discriminating in their choices of bed partner than men are…..sorry, that’s not the point here?

Ahem, sorry. Sir Alan Sugar is a British businessman and there’s two things you might like to know about him. He hosts The Apprentice, the UK version of the TV show that Donald Trump runs in the US. The other is that back in the day, at the dawn of the PC computer age, he was one of the very few people ever to have out negotiated Bill Gates.

However, these two sterling qualities don’t mean that he’s always correct: but you should make up your own mind about this statement of his:

Women bosses are more likely than men to discriminate against female employees with children, Sir Alan Sugar has told The Times.

Sir Alan, executive chairman of Amstrad and Viglen, discussing the issue of working women and the provision of childcare, said: “Be under no illusion. There are women employers who are more ruthless than men. They are more conscious of not employing other women because they feel they’re not going to get the value of work out of them.”

It’s an interesting point but one that without actually doing the empirical research we cannot know the truth of. However, this thouches on something we have mentioned before.

He thought it right that women were asked about their plans to have children and how they expected to look after their children while at work. “I think it’s right for women to volunteer the information,” Sir Alan said. “Companies have no divine duty to help with childcare. Companies employ people. It’s the Government’s responsibility to provide childcare. You pay a person a salary and they cut their cloth accordingly.”

That is, maternal profiling.

Sir Alan, who fronts The Apprentice, which starts a new series on BBC One tonight, has been criticised for arguing that equality laws make it more difficult for women to find jobs.

Indeed, it’s an obvious and logical outcome of those equality laws, that they make women who do have children more expensive to employ and thus they are either paid less or find it more difficult to get a job.

There’s nothing very surprising about this, it’s a natural part of the way the world works: the only thing we can possibly be surprised about is the number of people who seem not to understand it.

Discrimination Against Caregivers?

March 20, 2008 By: Tim Worstall Category: Gender Differences, Gender Pay Gap, Pop Culture 1 Comment →

This is an exceedingly interesting essay, a book review of a chapter of “Discrimination Against Caregivers?” by Erin Kelly. It breaks out the various pieces and parts about differing gender roles that lead to the gender pay gap and comes tohte same answer that I think most of us are now. That said pay gap is not about direct (or taste) discrimination, but about the way in which men and women choose to do different things with their lives.

But it’s also interesting in the way that the different influences are given a different weight than they might be by a less, say, feminist author. For example:

II. Theories Explaining the Economic Consequences of Caregiving

1. Human Capital Theory

This puts the responsibility of the consequences on the women: differential investment in occupational attainment results in differential economic returns. Women are more likely to leave the workforce; work fewer hours, invest less in education and training; expend less effort when working; and choose occupations or jobs that have lower penalties for working less and greater possibilities for part-time work, jobs that tend to be lower-paid. I am not persuaded by these theories, and Kelly cites a number of studies that refute the proposed explanations for economic differentiation.

Until that last sentence I would agree absolutely. A simple look at the world around us would show that these things do indeed happen. As this piece in The New Statesman says (a left leaning UK magazine):

It is important to be clear what the problem is. Is it bad news that women want to spend time with their children? Surely not, given the evidence for the importance of parental engagement in the early years of a child’s life. Are these women “forced” into part-time work, and now just grinning and bearing it? No - the overwhelming majority say they positively chose part-time work, and their job satisfaction is higher than that of mothers working full-time. Most men and women, according to the British Social Attitudes Survey, think that a conventional division of labour is the right one, with mothers taking on the bulk of responsibility for childcare.

Quite how one can be “unpersuaded”by such theories when they are clearly and obviously true as an explanation of at least part of the pay gap is beyond me.

Where I really disagree though is in th ideas for solving this “problem”. For the author seems to have missed something very important here.

Still, changing anti-discrimination law to address the economic marginalization of caregivers would achieve the following:

1. Recognize the marginalization of caregivers as inefficient and a legal liability

2. Re-evaluate the meaning of work and how work is rewarded

3. Ensure that caregivers are not economically penalized for taking advantage of family-friendly policies

4. Create enforcement mechanisms for ensuring meaningful compliance with the new redefined anti-discrimination law in the form of sanctions.

We’ve seen what happens when such anti-discrimination laws are put into place. For example, many European businesses will simply not hire young women presumed to be fertile, or likely to have a child. The costs of employing someone who does then take the extensive maternity leave on offer simply makes them too expensive. If we add to the possible expense of hiring women, by stating that caregivers should be given extra (and expensive) rights, then we’re simply paving the way for businesses to employ fewer of them, or for offering lower wages to those that they do hire.

Quite how this is going to narrow the gender (or caregivers’) pay gap I can’t really see.

There’s More Than One Gender Gap

March 18, 2008 By: Tim Worstall Category: Current Affairs, Gender Differences, Gender Pay Gap 2 Comments →

I thought this was an excellent little article.

We’ve seen plenty of wives in this position in recent years. But it’s hard to imagine that political husbands are haunted by the nightmare that it might happen to them.

Perhaps that’s because they know their wives have lower expectations of spousal adoration than their male peers, or because unfaithful women tend to have affairs with equal or higher-status men, who have an equal or higher stake in discretion.

If a female political leader did get caught in a sex scandal, having her husband stand silently by the podium while she sought forgiveness would probably make matters worse. Many Americans would conclude that she was a castrating witch married to a wimp.

We do indeed seem to have something of a double standard here. I’ll also admit that I really don’t know why Eliot Spitzer’s wife didn’t simply slam the door of the family home on him and tell him to get lost. But, well, not my life to run, is it?

It’s also true that infidelity itself is thought of rather differently these days. It’s not all that long ago (yesterday in some countries, and tomorrow as well) that infidelity by men was almost normal. infidelity by married women being regarded as something much more serious (although sex in an age without effective contraception explains at least some of this).

This though is the meat of the piece for me:

This double standard can be seen in business as well as politics. Outright discrimination on the basis of gender has been all but eliminated in the workplace. But women still face discrimination on the basis of family status. Today, unmarried and childless women earn just about as much as men, and in several American cities women in their 20s earn more, on average, than their male peers.

Yet, once spouses and children enter the picture, the gap between men and women again widens. Married men have an earnings advantage over unmarried men. Married women, however, have no such advantage over their single counterparts, and women with children face substantial penalties.

In 2005, Cornell researchers Shelley Correll and Stephen Bernard created 600 fictitious resumes for midlevel marketing positions. Half mentioned relocating with their families and indicated participation in a school board; the other half simply mentioned relocating, with no reference to family. Women who did not mention family ties were almost twice as likely to be deemed hirable.

And when applicants with discernible family ties were selected, men with children were offered a salary of, on average, $6,000 more than childless men, while women with children were offered $11,000 less than the childless women.

I’ve long been proposing the contentionthat we don’t in fact have a gender pay gap. We have a child care pay gap, one which for a number of reasons (you can argue for societal expectations or for biological determinisim, doesn’t affect my main point) is carried almost exclusively by women.

Now, whether we want to do something about it or not is one matter: but only if we correctly identify the problem, accurately divine the causes, will we in fact be able to do so.

If we should so wish, that is.

The Truth About the Gender Pay Gap

March 11, 2008 By: Tim Worstall Category: Current Affairs, Gender Pay Gap, Higher Education 2 Comments →

This is really rather surprising, a left wing organisation like the Trades Union Congress, being reported in a left wing newspaper, The Guardian, actually makes a sensible statement about the gender pay gap.

The difference between men’s and women’s pay more than trebles when women reach their 30s, TUC research revealed today. It found women leaving school at 16 and going into a full-time job earn 9.7% more than their male contemporaries. But from the age of 18 - and throughout the rest of their working lives - they earn less than men.

In their 20s, the pay gap for full-timers is a modest 3.3%, but in their 30s women take home 11.2% less than the men. And in their 40s - the peak age for discrimination - the gap rises to 22.8%. The TUC said the undervaluing of women in the workplace was partly due to a “motherhood penalty”.

All of that is true, my only quibble with it would be that they say “partly” due to a motherhood penalty while I would say mostly if not completely. However, they then go and spoil their copybook by saying this:

The hourly earnings of women working part-time were 23.4% less than the male rate in their 20s, 41.2% in their 40s.

As we saw here recently, this simply isn’t true.

But I think I should reserve my greatest scorn for this particular piece of nonsense.

The long hours and intensity of senior positions deterred mothers from seeking promotions for which they were qualified.

If you’re not prepared to do the hours required, nor deal with the intensity, then you’re not in fact qualifed to do a job that requires either or both of those things, are you? But there is merit in the piece as a whole: it’s another brick in our wall of evidence showing that there really isn’t a gender pay gap, there’s a motherhood pay gap.

Quite what we might do about it is another matter, but only if we identify the causes properly will we ever be able to resolve the situation: indeed, only if we identify the problem properly will we be able to decide whether we want to or not.

The Gender Pay Gap in the UK

March 06, 2008 By: Tim Worstall Category: Gender Pay Gap 5 Comments →

There’s a lot of nonsense talked about how large the gender pay gap is in the UK. Worth, perhaps, simply laying out the figures in full.

They come from the Office of National Statistics, here. We’re using hourly pay, gross, because those are the numbers that the Equal Opportunities Commission, and thus everyone else, use. We calculate from mean wages as well, so all of the following are means.

Male: £ 14.29

Female: £ 11.24

The pay gap is thus 22%. Ah, but, there are many more women who work part time than men and part timers get less per hour than full timers (it costs more to employ part timers). So that’s not really accurate.

Male full time: £ 14.50

Female full time: £ 11.98.

The full time pay gap is thus 17% and that is the number that is generally reported.

The problem with these numbers comes when people attempt to calculate the part time gender pay gap. We need the following:

Male part time: £ 10.47

Female part time: £9.14.

So, the gender pay gap amongst part timers is 13%.

However, the number normally reported is in the high 30’s%, perhaps even 40%. How can this be so?

The difference in pay between female full time and female part time is 24%. That between male full and part 28%. So men lose more than women by working part time. But clearly there’s something that means that part timers, of either sex, earn less than full timers.

So, again, where does this 40% or so number come from, the one that is regularly bandied about in the press?

Well, what actually happened was that the original calculators of the number, the Equal Opportunities Commission, specifically and deliberately decided to compare female part time wages to male full time.

That is indeed, with this year’s figures, 37%. The thing is though, they told everyone, upfront, that this was how they were doing their calculation. No, really, they did. They said they were calculating the difference between part time pay for women and full time pay for men. Quite why I’m not sure….well, actually I am sure. They wanted to squeeze the largest number they could from the dataset.

Unfortunately, everyone else who uses this number seems to forget (or not know) the origin. It gets reported as “if women work part time they earn 37% less than men” and that really isn’t correct. At best it’s a malignant manipulation of statistics to make a political point, as worst it’s outright lying.

There is indeed a gender pay gap. There is also a part time pay gap. But unless we’re all willing to identify them accurately, we’ll never then be able to go on to identify the reasons for such gaps. And if we can’t do that then we’ll never be able to decide what, if anything, to do about them, will we?

Just to repeat. The gender pay gap is 22%. The full time gender pay gap is 17%. The part time pay gap for women is 24% and the part time pay gap for men is 28%. It’s only the final, the part time paygap for women plus the gender pay gap itself, which gets us to the 37% number.

But it’s that last, the largest, which is the one always quoted. I wonder why?

Maternal Profiling

February 24, 2008 By: Tim Worstall Category: Gender Differences, Gender Pay Gap 2 Comments →

You’ve just got to love The Guardian. They’ve got a long complaint here about maternal profiling. That is, the way in which companies try to find out whether women have children, are likely to have children, before they make the decision as to whether to hire them or not.

The unlikely new face of radical women’s activism in the US? Meet Kiki Peppard, a 53-year-old switchboard operator and grandmother from Pennsylvania who claims she is one of millions of victims of “maternal profiling”. Defined as “employment discrimination against a woman who has, or will have, children”, feminist groups say that maternal profiling has reached epidemic proportions - and is getting worse. In essence, it involves employers building up information on a woman’s age, marital status and family commitments to determine whether to hire her, how much to pay her and how much responsibility to give her. Is she likely to have children and need maternity pay? Will she want to work shorter hours?

It’s extremely difficult to say that this woman, or any other who has been subject to maternal profiling, is a “victim”. Well, unless you mean a victim of well meaning but counter-productive intervention into the labor market.

In the UK, asking questions in a job interview about a woman’s maternal status would leave an employer open to a sex discrimination case, yet there is a great deal of evidence that such profiling goes on unspoken. And it is a practice that affects not just mothers, but all women of childbearing age. Whether or not you intend to have children, the possibility that you might, could well be enough to put off a potential employer.

That is all true but it simply makes all women victims in that second sense.

Last year, a survey by the new Equality and Human Rights Commission, headed by Trevor Phillips, found that 70% of recruitment agencies had been asked to avoid hiring women who were pregnant or likely to get pregnant. The commission also found that mothers face more discrimination in the workplace than any other group. Those with children under 11 were 45% less likely to be employed than men, with that figure rising to 49% among single mothers.

As is all of that, however illegal it might be.

A YouGov poll of 1,000 UK directors, also conducted in 2007, revealed that 21% knew of instances where their company had avoided hiring women of child-bearing age - 19% admitted to making this decision themselves. In the same poll, more than two-thirds of senior executives said that the bureaucracy surrounding parental leave posed a “serious threat” to their companies. And in 2004 an extraordinary survey by HR information provider Cromer found that eight in 10 human resources managers would “think twice” before hiring a newly married woman in her 20s.

Set aside, for a moment, what “ought to be” and look at what is actually happening. Companies are going out of their way not to hire women who either might have children already or have them in the future. They’re going so far out of their way that they are straying, in the UK at least, into illegality to do so. But why?

The explanations they give don’t have anything to do with the patriarchal society, with taste discrimination or anything like that. They believe that hiring women with or about to have children will cost them money. They are thus acting rationally in trying to avoid that loss: preferring, instead, to hire people with lower costs.

So what is causing these higher costs to employers? Well, it seems pretty obvious that it is the requirements to pay for maternity leave, to keep the job open if the woman wants to return, the need for more flexible working hours so she can take care of her caring responsibilities and so on. That, at least, is what the companies themselves say they think. Now, you might think that it is right that a company should have to bear these costs, you might not. But it seems impossible to escape the point that these are costs and as such the companies are trying to avoid them as they rationally will.

Now as far as creating victims, no, I’m no suggesting that companies themselves are victims here. But also that those subjected to maternal profiling are not victims either. The victims here are all women of childbearing age whether they want to have children or not, when maternal profiling is not allowed.

Think again about what we have here. We have some costs which (at our level of technology, at least) cannot for biological reasons simply be wished away. If employers are able to exclude those who will burden them with these costs, breeders current and future, then all those, men and women, who do not carry said risk will be treated equally.

But if it is illegal for companies to try and discriminate so, then all women of child bearing age will be (to a lesser degree) discriminated against. Thus, in the UK findings, companies are less likely to hire women (whether they intend to have children or not) at all, and those they do hire will be offered worse terms than men.

And thus the victimhood: at least part of the gender pay gap is because of the costs that some women impose upon employers via such things as maternity pay and the rights to flexible working etc. If employers are not able to pick and choose amongst those who may or may not impose said costs, then they’ll even them out across all women.

I’ve said before that there isn’t in fact a gender pay gap: there’s a childcare pay gap. This is just another example of how that comes about. One perhaps provocative prediction: if we abolished all maternity laws, we’d see a drop in the pay gap.

Statistical Discrimination

February 14, 2008 By: Tim Worstall Category: Gender Pay Gap 2 Comments →

As we go through the numbers about the gender pay gap, something I’ve promised to do here, we need to make a distinction between two different types of discrimination.

The first is what is usually referred to as “taste discrimination”. This certainly was very common but we really rather hope that it’s extinct now. What we mean by “taste discrimination” is direct discrimination: a company doesn’t hire blacks because they don’t like blacks. Or women get paid less simply because the boss insists that women should be paid less (this lasted a lot longer under the cover of “men get paid more because they have families to support”). Not only is this form of discrimination now illegal (almost all of the time, at least) it’s also to an economist irrational -if you refuse to hire a good black or female worker just because they are black or female then your competitor down the road gets those good employees cheaper and drives you out of business (the corollary of this is that what actually improves the wages and status of workers is many employers competing for their labor).

The second type of discrimination is “statistical discrimination”. It’s discussed in Tim Harford’s new book and Bryan Caplan has a good discussion of it here. While the original discussion was about race it does extend to our questions about the gender pay gap.

For example, many (most?) women want to have children. This puts those who do not, or who value their career above being at home with their children, at a disadvantage. For employers will rationally discriminate against women (that is, statistically) because any random woman applying for a job is likely to want to take time out to have and raise her children. Thus the employer will offer women as a class worse working conditions: perhaps lower pay (although that’s very difficult nowadays), or less training, or fewer promotions. Because that employer knows that she’s likely to lose that employee for some years of her working life.

That, in turn, means that women will on average have lower wages than men and thus make it more likely, if a family has a choice, that it is indeed the woman who raises the children rather than the man being a house husband… because he’s likely to be getting higher wages than she is. The two thus reinforce each other.

But our woman who doesn’t want to drop out of the rat race also gets clobbered by the same problems: she’s likely to be overlooked for promotions, paid less, trained less well. Quite how we get out of this isn’t really certain at this point. Caplan has a very inventive idea though:

Example: Some young women are 100% focused on their careers, and don’t want kids. Most young women, however, do want kids, and intend to strike a balance between work and family. That balance often involves receiving expensive job training from a firm, then quiting before the firm can recoup its expenses.

Under current law, an employer isn’t even allowed to ask about a female applicant’s child-bearing plans. If you wanted to blow up the glass ceiling, though, you should not only allow employers to ask; you should allow them to offer deals like “We’ll hire you, but your health insurance doesn’t cover pregnancy.” The career woman would be happy to sign, reassuring the employer.

How will that help women? It won’t! On average, it’s a wash: It will help career-minded women, and hurt the rest. And if you want to judge female workers on the basis of individual productivity, that is exactly what should happen.

We could go further: we would be able to remove some of the motivation for the gender pay gap by removing some of the general rights that surround pregnancy and child rearing. For example, there is a connection between long maternity leaves and women’s careers: we can see that in countries with long such times out of the workforce, women have greater difficulty in breaking the glass ceiling.

Quite whether we want to do that is another matter, but that’s the sort of question we’re going to try and work through over the next month or two.

A Slight Change Of Course

February 10, 2008 By: Tim Worstall Category: Gender Pay Gap, Vivre la Difference 2 Comments →

Over the next few weeks (perhaps longer) as well as your regularly scheduled entertainment I’m going to be taking a close look at the gender pay gap. It is, after all, the major problem in the modern workplace.

Does it come from gender segregation, that men and women work in different jobs? Does it come from direct discrimination, women simply being paid less than men for the same job? Is it about career choices, career breaks to have or to raise children?

I’ll be looking at a number of different papers on the subject: but please be warned, the statistical analysis will be coming from UK numbers, not US. Simply because I know where to find those numbers. But given the similarities between the two societies, we should be able to find out points of interest from one to illuminate the other.

I might as well start by coming clean: I am sure that there was indeed direct discrimination in the past. I’m very much less convinced that there is (very much) such now. I already believe that it is differences in the choices made by men and women that causes the difference in pay.

But I will be following the evidence where it takes me and if we find that there is indeed direct discrimination then I shall be surprised, but I will report it.

Are Women Less Productive Than Men?

February 08, 2008 By: Tim Worstall Category: Gender Differences, Gender Pay Gap 2 Comments →

We all know that there is a gender pay gap, of course. In the US women earn 71 cents to every dollar earned by men: in the UK the average wages for women are in fact 17% lower than they are for men. The big and interesting question is just why this is so.

Certainly in the past there was direct discrimination against women, both in the jobs they were allowed to do (especially after marriage) and in the pay they would receive even if doing the same job as a man. But how much of the gender pay gap is now explained by that and how much by more rational reasons?(Please note that just because there are rational reasons for something doesn’t mean we might not want to change the outcome. Just that how to change the outcome will be different dependent upon what the reasons are.)

An interesting little story from the UK:

Female consultants working in the NHS are 20 per cent less productive than their male counterparts, researchers claim today.

Various reasons are put forward: that women have greater family committments and so see fewer patients, that women, being (in general) more empathic spend longer with each patient, even that women spend more time on administration and teaching than men do. But to me the most interesting point is this:

The researchers used the HES data to chart the workloads of 7,236 male and 1,048 female consultants working in 10 of the most common medical specialities in hospitals in England during 2004-5.

After adjusting the figures for age and different specialities, it was found that women completed an average 626 “consultant episodes” (CEs) - periods of care under a consultant for a patient admitted to hospital - compared with 786 for the men, 20 per cent less.

Previous studies in the US and Canada, where doctors’ pay is related to the number of patients they see, have found reached similar conclusions.

UK consultants are paid a flat rate (and it is the same for men and women): yet we see the same outcome in the US and Canada where people are paid by how many patients they see. So there is, under two entirely different incentive and pay schemes, the same difference in productivity. And we do need to note here that productivity is the number of patients being seen: there is no hint even that the outcome for patients is different dependent upon who they see. It isn’t that women (or men for that matter) are providing better but less treatment: they’re just providing less.

Now of course it’s a huge leap from one specific profession to the generality of jobs in the economy: but it is productivity, the amount of work being done, that is normally what is being paid for. So if women are in fact producing less output, should it be any surprise that they are paid less?

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