The Statistical Gender Gap Fallacy of Unequal Pay for Equal Work and Equal Hours

Too much has been written about the gender pay gap; too much because what has been written is often wrong and hysterical about a subject which has a completely innocuous explanation.  What the Left has written about this topic is like everything else they write:  a chaotic mess of lies, and illusions arising from their own ignorance.

And just as the Left brings about chaos, the Right fails to counter effectively.  In their attempt to debunk the existence of the gender gap, the Right falls short in the argument because it acts out of defensive impulses.  This is in keeping with the perpetual historical theme of the modern Right, both mainstream and fringe – inadequacy.

The standard, incomplete, conservative arguments made to debunk the existence of a pay gap between men and women – failures of studies to use the right control groups, wrongly equating qualitatively different types of work as similar, test scores, differences in psychology between genders – have been proposed, but are still lacking.

These points are often true, but after these factors are added a pay gap of more or less 20 cents to the dollar remains.

There is still a missing factor that after being controlled for nearly eliminates the gap, reducing it to only a few cents.

That factor is the reduction in time women spend working after giving birth.

For proof, which should put the issue of the pay gap to rest for good, we turn to a study titled Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors (2010).

The study surveyed MBA alumni from the exclusive Booth School of Business of the University of Chicago who had graduated between 1990 and 2006.  Following their graduation the careers pursued by these MBAs were primarily with top firms in the elite value transference fields of financing, corporate services, and consulting.  These fields have often been the target of so many accusations made by feminists for being unfairly dominated with male-workaholics.  And the pay gap, which exists, is wrongly put forward as proof of their misogyny.

Using regression analysis, the authors controlled for the standard independent variables in gender gap research:  GPA, type of courses, GMAT scores, age, race, marital status, pre-MBA and post-MBA work history, years since graduation, job function, employer type, and others.

After these causal factors had been controlled for in their statistical model the authors still found a gender gap in income outcomes.

What eliminated the gap to a statistically insignificant 3 to 5 cents was the addition to the model of time variables measuring how long men and women spent out of the workforce.

Women MBAs in their sample, of course, had after giving birth tended to spend more time over their career out of the workforce than male MBAs.  After maternity leave women also tended to later cut back on their hours worked, if they returned:

Labor supply factors explain most of the remaining gender gap in earnings. The inclusion of a full set of dummy variables for weekly hours worked reduces the raw gender gap of 29 log points (column 1) to 17 log points (column 4). Adding hours worked to the specification including pre-MBA characteristics and MBA performance lowers the remaining gender gap to 9 log points (column 5). The gender earnings gap is reduced to just 6.4 log points (column 6) with the further addition of a quadratic term for post-MBA years of actual work experience and a dummy variable for the presence of any post-MBA career interruption. Augmenting the model with (arguably even less exogenous) variables to control for reasons for choosing one’s current job, job function, and employer type further reduces the coefficient on the female dummy to a (statistically insignificant) –3.8 log points (column 8).[1]

What this means for conservatives, and what should be the end of the debate, in plain English:

  • There is no statistically significant earnings gap between men and women in the same type of work, with the same experience, and the same amount of hours worked.

More basically:

  • There is no statistically significant earnings gap between men and women in the same type of work, with the same experience, and if women do not have children.

The political implications of this study are obvious.

First, this proves that the pay gap is not the result of bias against women in male-dominated fields. 

Secondly, women were not unfairly penalized for spending time giving birth to and caring for children.  Statistically, men suffered a higher reduction in their hourly earnings than women for taking time out of the work force.

Lastly, and most importantly in the policy debate the gap has raised, there is nothing an employer can do to eliminate the gap.

Employers cannot advise their women associates to not have children in order to equalize their lifetime earnings with those of with men without risking a discrimination lawsuit and a publicity scandal. Businesses are also unable to force mothers under their employ to not take time off or not reduce their hours worked after giving birth without risking a discrimination lawsuit and a publicity scandal.

The decision to have children, and suffer the reduction in income that is very likely to follow birth, is entirely under the control of women associates and out of the hands of their employers.

At best an employer can reduce the total amount of time spent out of the workforce with better maternity and child care benefits. But this cannot completely eliminate the decision of most women to reduce work hours after having children even with the most generous child care package.  Even a small reduction in hours has a statistically significant impact on earnings, and most new working mothers will be sure to spend some time off.

The theory that women receive unequal pay, for equal work and equal hours, is false.

To the extent policy can narrow this gap, the gap can only be minimized, never closed.

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6 thoughts on “The Statistical Gender Gap Fallacy of Unequal Pay for Equal Work and Equal Hours”

  1. Parapundit has posted this video of a great lecture by Jon Haidt at Duke University. It’s long, but worth watching in full. Eventually, it explains the left’s view of inequality, including gender inequality in pay. In their view, all inequality is wrong, period. Haidt rightly describes an outcome of complete equality between groups (at least, where their “inputs”/competencies vary) as an abomination. But that is the world they want us to live in.

  2. @Lioncub

    Parapundit has posted this video of a great lecture by Jon Haidt at Duke University. It’s long, but worth watching in full. Eventually, it explains the left’s view of inequality, including gender inequality in pay. In their view, all inequality is wrong, period.

    Thank you. I am familiar with excerpts of Haidt’s work and will watch the whole video soon.

    What you and Haidt say about the Left’s view of inequality of any kind is true of their general attitude. However even for many Leftists they can hold onto dogma in the face of only so much evidence. After proof against them becomes overwhelming (as this study is against the gender gap myth) their minds work to ignore the issue, others begin to doubt their position, and a small number might abandon it altogether.

    Remember that for most other regression studies of the gender gap cited by Liberals, variables accounting for the reduction in time women spend at work after giving birth are not directly refuted in the study, but simply omitted from the studies. This omission preserves the deceptive ~20 cent (or ~20 pence) wage gap between men and women most studies conclude with.

    Liberal researchers omit them partly because of deliberate deception, partly intellectual laziness. But they are also partly acting out of an “avoidance” instinct to not challenge their own beliefs with a fact that totally refutes them. By unconsciously cancelling out these facts they remain in their philosophical dreamworld.

    Directly challenging them with a fact, and a particularly important and obvious one such as my article brings up, can shake some of the ones acting unconsciously from their delusions. It will also convert many moderates who were undecided about the issue to agree with Conservatives.

    This study is especially useful to Conservatives because it is not usually used in gender gap debates, and it is therefore not “priced in” yet into the minds of people on the fence.

    Do feel free to point to this study of Booth School MBAs whenever you get a chance to debate the topic.

  3. I’m guessing you’re a bit younger than I am. I recall seeing the wage gap conclusively and mathematically dispelled back when I was in school (2001ish), either on a blog or national review or someplace similar. If I’m trying to have a grown-up conversation with someone and they cite the wage gap, I immediately shift into “trying to reason with a toddler” mode.

  4. I recall seeing the wage gap conclusively and mathematically dispelled back when I was in school (2001ish), either on a blog or national review or someplace similar.

    Do you remember what was the key factor discussed by the article? Many Conservatives have been arguing against a pay gap without referencing hours-worked; the factor that closes the male-female pay gap to only a few cents. If Conservatives don’t include it they’re missing the decisive point in the debate.

    If I’m trying to have a grown-up conversation with someone and they cite the wage gap, I immediately shift into “trying to reason with a toddler” mode.

    They may go into that mode, but it isn’t persuasive to weak-Liberals or moderates. If in a debate you bring up the gender gap is actually 3 to 5 cents after hours-worked after childbirth are factored in, they really can’t come up with a counter argument because it makes perfect intuitive sense why that would be the key variable and because most studies they would use to counter your point don’t include it.

    They’ll try to ignore the point, but a weak response is not persuasive to moderates.

  5. If few liberals change their opinion or have serious doubts about it after they are shown this evidence it will still be obvious to most of them they are fighting an uphill battle when they struggle to come up with an explanation to save their argument.

    When they start spinning their wheels going nowhere is when those who can still be persuaded break in favor of the Conservative case.

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