My estimate of the gender pay gap is that women were paid about 7.7 percent per hour less than men on average in 2013, holding everything else equal. The gap was 14.3 percent in 1990. Depending on my regression specification, I was able to push the gender pay gap coefficients around only somewhat — I think the range of reasonable estimates of the 2013 adjusted gender pay gap is probably 4 percent to 10 percent.
Conservative pundits often seem more upset by the fact that 4.5 percent is less than 23 percent than by the fact that 4.5 percent is more than zero percent. But I’d be pretty pissed if someone cut my pay 4.5 percent. And I’d be really pissed if they did it because I’m a man rather than because of something related to my job performance.
MP: So let’s assume that there’s a pay gap of 4-10% after controlling for all of the available relevant variables that affect earnings, and that some of that pay gap is the result of gender discrimination in the labor market – the kind that gets Matt and lots of women really pissed. But what if gender discrimination could be completely eliminated, would there still be a gender wage gap for reasons not related to discrimination against women by employers? I would argue the answer is clearly Yes, and here are three reasons (among possibly many others) why:
1. Risk Tolerance: Men have a much, much higher tolerance/attraction towards high risk behavior than women, and that means that there will always be more men than women in high-risk, high-paying jobs/industries like coal mining, roofing, farming, construction, commercial fishing, oil and natural gas extraction, firefighting, correctional officers, logging, etc. As my AEI colleague Andrew Biggs pointed out recently:
As far as I know, most statistical analyses of the gender pay gap don’t account for the physical risk of jobs. So, if you include the physical riskiness of an occupation into a wage regression, the unexplained pay difference between men and women — which we’re so eager to attribute to gender discrimination — will shrink further.
How we know that men have a greater risk tolerance/attraction than women?
Workplace fatalities: In 2012 (most recent year available) 4,045 men died on the job (92.3% of the total) compared to only 338 women (7.7% of the total). Almost 12 men died on the job for every woman who died while working in 2012 because a disproportionate number of men work in higher-risk, but higher-paid occupations like coal mining and oil and gas roustabouts (almost 100 % male), fire fighters (96.5% male), police officers (86.6% male), correctional officers (72.8% male), farming, fishing, and forestry (78.3% male), roofers (99.3% male) and construction (97.4% male); BLS data here for 2013. On the other hand, a disproportionate number of women work in relatively low-risk industries, often with lower pay to partially compensate for the safer, more comfortable indoor office environments in occupations like office and administrative support (77.3% female), education, training, and library occupations (73.8% female), and healthcare practitioners (74.4% female). The higher concentrations of men in riskier occupations with greater occurrences of workplace injuries and fatalities suggest that more men than women are willing to expose themselves to work-related injury or death in exchange for higher wages. In contrast, women more than men prefer lower risk occupations with greater workplace safety, and are frequently willing to accept lower wages for the reduced probability of work-related injury or death.
Q: What about the claim that women want to work in high-risk, high-paying occupational sectors like getting jobs as oil roustabouts, coal miners, loggers or roofers, but they aren’t given enough opportunities in the labor market to demonstrate a female risk tolerance/attraction that is equal to men?
A: We have empirical data that overwhelming reveal that women demonstrate a much, much lower risk tolerance/attraction than men, outside the labor market. For example, 91% of motorcyclists killed in 2012 were males (data here) and 93.4% of federal prisoners are men (data here). If women really were willing to accept higher pay for higher occupational risk, why doesn’t that show up in the data for risky behavior outside of the labor market? Probably, because they really don’t have an equivalent risk tolerance/attraction as men, and that will contribute to a gender wage gap that will never shrink to 0.
2. Professional sports are male-dominated, and professional athletes earn a lot of money. Of the 100 world’s highest-paid athletes, there are only three women on the most current Forbes list. Average salaries for America’s most popular professional sports are $5.15 million for the NBA, $3.2 million for MLB and $2.4 million for the NHL, and $1.4 million for the NFL. In contrast, the average salary for women in the WNBA is about $72,000 (and “Equal Pay Year” would occur in the year 2086 – that’s how long the average player in the WNBA would have to continue to play to earn the same as the average NBA player earned this year). As long as male sports have disproportionately greater fan interest, higher attendance and ticket prices, there will be a huge gender pay gap in professional sports, which will continue to contribute to an overall gender pay gap for the US that has nothing to do with labor market discrimination.
3. Men outnumber women among the highest paid musicians. Of the world’s 26 highest paid musicians in 2013 according to Forbes, men outnumbered women by more than two-to-one, or 18 men or male bands to 8 female artists (whose bands are probably predominantly men). Of the top 25 highest grossing musical acts in 2013 according to Billboard, male artists and bands outnumbered female artists by a factor of 3:1, or 18 male artists/bands to 6 female artists (whose bands may be predominately men). As long as highly paid male artists and bands outnumber highly paid female artists in the music industry, there will be a gender pay gaps in both the music industry for the labor market as a whole, neither of which is the result of employer discrimination against women.
Bottom Line: Even with perfect pay parity by gender in most occupations in the labor market, wouldn’t the three factors above (among many possible other ones) contribute to persistent gender pay gaps when comparing salaries nationwide by gender that have nothing to do with employer-based discrimination against women?