Why Some Women Skirt the Wage Gap
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There are few issues as sensitive to a generation of women who work because of ambition, interest, and necessity than the issue of the gender wage disparity. There are few things so profoundly unfair as the idea that women routinely and pervasively earn less than men for precisely the same work. Even more -- when women have shouldered a greater share of the household income burden, as the recession stole the jobs of husbands and fathers in construction and factory jobs -- the fairness issue seems to pale in the face of sheer survival concerns. If a woman must work but she cannot provide the necessary level of income, her entire household suffers the cost.
In some occupations where women earn more than their male counterparts, the reasons may not have broad implications.
But there is also evidence that women earn more in executive management positions. In the recent working paper,
"Gender Differences in Executive Compensation and Job Mobility," researchers who studied the pay of executive managers at public
companies found that among executives of the same rank and background, women are paid more than their male counterparts and are
promoted just as quickly. "When you are comparing gender gaps, you have to be careful you're not comparing apples and oranges,"
says coauthor of the working paper
The researchers controlled for variables such as educational background, career transitions, and longevity, so that comparisons could be, essentially, apples to apples. They found that controlling for those variables eliminated the male earnings advantage among executives. When variables are not controlled for, female executives earn less because they leave the working world at higher rates than men.
"The gender pay gap and job rank differences are primarily attributable to female executives attritting at higher rates than males in an occupation where survival is rewarded with promotion and higher compensation," according to the authors. This suggests that researchers should be investigating not why women are paid less than men, but why women are leaving public companies, Gayle says. Although the data does not explain why women are paid more, the authors raise the possibility that women who reach the highest levels of business have chosen to stay in the workforce because they excel at what they do, while men may more generally feel that they ought to keep climbing the ladder.
Farrell points to the wages of women and men who have never married or had kids: In this case, women earn 117 percent of what men earn, he says. When it comes to family responsibilities, women tend to make work-life choices with the goal of having a more balanced life, Farrell says, while men tend to make choices that lead to higher earnings. Women with families are more likely to try to work at home and avoid long-distance travel. St. Louis Federal Reserve researchers studied wage differences between married men and unmarried men and married women and unmarried women. Married men make more than unmarried men, but marriage alone has little effect on women's earnings. What does have an effect? Kids. "Wage differences between married and unmarried women can be explained by observable factors related to marriage, most notably, childbearing and childrearing," according to the 2003 report.
Farrell posits that the pay gap will be reduced or increased based on the parenting decisions made more than other single factor. "If women earn less than men for the same work, then when a man and woman get married, it makes sense for the woman to stay home and for the man to go to work," Farrell says. "But the deeper truth is that when women put the type of time and energy and flexibility into the workplace -- like traveling overnight or going overseas or relocating -- and the man becomes the raiser of the children, then women, from what I can tell, actually earn more than their male counterparts."
Executives, however, are generally past child-bearing years, so this doesn't easily explain why executives leave the workforce at higher rates than men. It may better explain why so few women become executives. (Also, some women may plan their careers in anticipation of fewer opportunities for promotion and high pay, and avoid shooting for executive positions.) In their working paper on executives, Gayle, Miller, and Golan consider the possibility that female executives leave because they may face more "unpleasantness, indignities, and tougher unrewarding assignments at work."
Much of the research into the gender wage gap has found that after other variables are controlled for, women still experience lower wages. Gender discrimination has typically been considered one possible explanation for the remaining gap. One recent study looking at more than 4,000 MBA graduates found that women grads earned an average
On Equal Pay Day last month, President Obama issued a proclamation that drew the larger implications of wage concerns: "Our nation's workforce includes more women than ever before. In households across the country, many women are the sole breadwinner, or share this role equally with their partner. However, wage discrimination still exists."
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Personal Finance - Why Some Women Skirt the Wage Gap
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