Is the gender pay gap evidence of discrimination?

Question

(I've asked this before but people had troubling separating the question from just the gender pay gap. This is a way I was suggested to ask it, so I am giving it a try)

No one can deny the gender pay gap exists, but is it evidence of discrimination? I would like to limit my question to western countries, as the question becomes irrelevant or too complex when looking at countries where gender equality is not a consideration.

According to many parties, yes.

The gender pay gap has many contributing factors and causes, of which discrimination is only one. According to various groups of activists or protestors the primary reason for the gender pay gap is pay discrimination on the basis of gender.

Given the more simple explanations such as differences in hours worked(men tend to work more hours) and types of jobs(men tend to do more laborious intensive or dangerous jobs) does it still make sense to consider gender pay discrimination a significant factor?

My understanding is that the gender pay gap is only apparently when looking at the entire set of women compared to the entire set of men, regardless of jobs or hours worked. When you look at any specific field men and women earn equivalent wages, based on experience or skills and not gender.

Are women with equivalent skills and experience as men being paid less for the same position on a wide enough scale to contribute to the pay gap?

Part of the reason for this would be the anti-discrimination legislation, simply not making it worth it to discriminate with pay based on gender.

Which is not to deny that discrimination happens, but to say that it happens on a large enough scale to result in the gender pay gap is surely incorrect?

So, is the gender pay gap evidence of discrimination, or simply evidence of a pay gap?

Answer 1

Like anything else, it's a combination of factors.

The London School of Economics did a pretty in-depth study and found:

The main cause of this is that many women continue to take breaks from paid employment when they have children. The problem is not that women are choosing one career – such as hairdressing – rather than another – such as plumbing. It is that they are continuing to choose family over career at some point in their life.

However, the same study also goes on to say that:

While career breaks clearly have an impact, my research with Joanna Swaffield finds that most of the gender gap in wage growth among young workers cannot be explained by differences in labour market attachment. For example, we estimate that a woman who has worked full-time ever since leaving full-time education can still expect to be paid 12% less than an equivalent man after 10 years.

The cause appears to be a combination of factors. This study sites the following as the cause:

One way of seeing this is in the evidence that women are much less likely to become managers...Some recent research (see Babcock and Laschever) suggests that systematic differences in personality are responsible – for example, that women are intrinsically less competitive than men, tend to be less self-confident and less effective in negotiation. This might be because of intrinsic differences between men and women or because of gender stereotyping within the education system.

The report ends with the remark that, "that it is now not so easy to identify the remaining causes of the gender pay gap."

So to summarize this study, the main causes seem to be breaks from employment and personality differences. The study also mentions that the pay gap has been decreasing in recent years, although does not mention if this is due to less focus on staying home with the kids or less discrimination.

However, Ian Watson (published in the Austrian Journal OF Labour Economics) takes a slightly different opinion on this. The abstract of his study is that:

The results show that female managers earned on average about 27 per cent less than their male counterparts and the decompositions suggest that somewhere between 65 and 90 per cent of this earnings gap cannot be explained by recourse to a large range of demographic and labour market variables. A major part of the earnings gap is simply due to women managers being female.

You can read the statistics in the paper, but the results are:

The extent to which discrimination accounts for the gender pay gap varies between 65 per cent and 94 per cent, depending on the approach one takes. The higher figure comes from using the Oaxaca method, while the lower figure comes from the Blinder method. These decomposition results are shown in summary form in table 5 and with a more detailed breakdown in table 6.

The U.S. Government Accountability Office did another study and determined that discrimination is indeed a factor:

In 2003, GAO found that women, on average, earned 80 percent of what men earned in 2000 and workplace discrimination may be one contributing factor

There has been a meta analysis done on various studies and this analysis found:

The results show that data restrictions – i.e. the limitation of the analysis to new entrants, never-marrieds, or one narrow occupation only – have the biggest impact on the resulting gender wage gap. Moreover, we are able to show what effect a misspecification of the underlying wage equation – like the frequent use of potential experience – has on the calculated gender wage gap. Over time, raw wage differentials worldwide have fallen substantially; however, most of this decrease is due to better labor market endowments of females. ... Our results show that data restrictions have the biggest impact on the resulting gender wage gap...For example, in the fixed effects regressions we find that studies where work experience is missing seriously overestimate the unexplained gender wage gap.

However, the study does still say there is some discrimination, but it is not as dramatic as others make it out to be. The resulting decrease in the pay gap is due to training and some decrease in discrimination.

From the 1960s to the 1990s, raw wage differentials worldwide have fallen substantially from around 65 to only 30%. The bulk of this decline, however, must be attributed to better labor market endowments of females which came about by better education, training, and work attachment...The ratio of what women would earn absent of discrimination relative to their actual wages decreased approximately by 0.17% annually. This indicates that a continuous, even if moderate, equalization between the sexes is taking place.

One thing to note as well is that the pay gap is higher in the public sector than the private sector. This tends to show there is an element of discrimination, as public sector jobs tend to have pretty strict promotion/pay increase rubrics.

In conclusion, it's caused by a number of factors, but it would be incorrect to make the claim that discrimination is not one of them. However, it's certainly not the only cause and it may or may not be the greatest cause.

In terms of the pay gap being evidence of discrimination, it certainly is, as most of the statistical studies say the gap is unexplained by other factors. The gap may not be caused solely by discrimination, but it does show evidence of some unexplained factor causing pay differential, which is usually attributed to discrimination when the other causes are explained. Causes such as time off for family and personality are included in the studies, but there is a statistically significant gap left unexplained that can be reasonably filled with discrimination. According to the studies I've posted, the gap decreases in the public sector and in large companies with pay scales. This points towards the pay gap being evidence to discrimination. Hence, the pay gap is evidence of an unexplained discrimination of women in terms of their compensation.

Answer 2

Yes it is

You'll notice I say it is evidence of discrimination, not proof of discrimination. There are studies that show that the gender gap is not only between 'women and men and as a whole', which could as you say be accounted for by other factors, but between women and men even after taking into account a large number of those factors.

Studies have been quoted here. A key study is this one which states:

After accounting for college major, occupation, industry, sector, hours worked, workplace flexibility, experience, educational attainment, enrollment status, GPA, institution selectivity, age, race/ethnicity, region, marital status, and number of children, a 5 percent difference in the earnings of male and female college graduates one year after graduation was still unexplained.

A similar analysis of full-time workers 10 years after college graduation found a 12 percent unexplained difference in earnings. [emphasis in original]

In essence it states that SOME of the pay gap is accounted for by college major, occupation, industry, hours worked, etc. But when these are taken into account, over and above that there is a part of the pay gap not accounted for by all those things.

Now it could certainly be that there are other factors, not considered by the study, which accounts for the disparity, though it becomes harder to think of any they haven't considered. It's also possible that the discrimination is 'unconscious', by which I mean that managers promote and reward characteristics that males are more likely to possess (possibly because they are ones they themselves have) without intending to be biased against women.

Additional references:

• London School of Economics

Answer 3

As gender roles are strongly tied to culture, it's hard to answer this in absolute terms. It would be hard to even speak about a gender gap in countries like Saudi Arabia.

In Europe, however, gender equality is the norm. For that reason, the EU considers the gender pay gap a relevant (supernational) subject. Its report is available, and covers 30 European countries.

Quoting:

The persistence of the gender pay gap [...] results from direct discrimination against women and structural inequalities, such as segregation in sectors, occupations, and work patterns, access to education and training, biased evaluation and pay systems and stereotypes