In honor of Women’s History Month in March, the White House released a report last week on women’s status in America. Among other findings, the data show that women have surpassed men in college attendance, but income inequality between the sexes persists. William Dickens, distinguished professor of economics and social policy, who specializes in labor markets and wage determination, discusses the persistent gap between men and women’s incomes.
Why does income inequality persist despite women’s gains in education?
There are several factors at work here. While the younger generation of women today has more education than men, there are still cohorts in the labor market from the time when women were less well educated than men. So that brings down the overall average. Also, women are still less likely than men to be found in those college majors — such as engineering and science — that lead to the highest salaries. It’s hard to sort out how much of this is due to women preferring work in other areas, as opposed to how much is due to discrimination and hostile environments in these fields.
Once out of school, the same sorts of factors come into play. Young women frequently take time off for childbirth and childcare. Men may take time off for childcare, but much less frequently than women. Consequently, some employers may feel that an investment in a young man is more likely to pay off than an investment in the career of a young woman. However, there’s clearly still discrimination and harassment that takes place in many workplaces where women are underrepresented. These are often better paying jobs than others available to those with the same level of education.
What can women do to increase their earning power?
Education pays off at similar rates for men and women. Even if women get paid less at a specific level of education, their earnings increase about as much as men’s when they have more education or more work experience. There is also some suggestion that women could be more assertive when it comes to advocating for themselves. On average, men are more aggressive in bargaining for wages and promotion, and that may explain some of the difference in pay.
Could the economic downturn pose a threat for women in closing the salary gap?
In the short run, I can imagine it either slowing or accelerating the closure of the gap, because there are numerous differences in how the recession is affecting men and women. However in the long run, I doubt the recession will make much difference. Barring a retreat on norms encouraging women to work, I see less and less resistance to women working in higher paying jobs. Also, women are finding themselves more comfortable in those roles as the number of women doing such jobs increases.