The Stubborn Facts Behind the Gender Pay Gap

The gender gap may be among the most misunderstood, not to mention politicized, of popular media topics. Raw numbers that fail to take into account for women’s lower working hours, time off for children, and different occupational choices are regularly waved around as evidence of brute discrimination. An important new paper by Harvard professor Claudia Goldin emphasizing the role of motherhood in the gender gap should mitigate the sectarian coverage, but for reasons that are partly Goldin’s doing, I’m guessing it won’t.

Headlines insisting “women earn 23% less than men for the same job” aside, researchers have known for years now that childless women earn much the same as men. As women have put off marriage into their later 20s, the gender gap has all but disappeared among young, childless men and women when you control for how many hours they work. In Goldin’s words, as “women ‘look’ more like men” in educational achievement and labor market experience, their earnings have followed suit. But if this current generation follows a similar path as previous cohorts, a gap will first open and then grow after they have children. Once women become mothers, they tend to reduce their hours of work and perhaps even “opt out” for a few years. Their earnings never fully recover.

In a more dispassionate media environment, none of this would be news. But Goldin discovers something original: the size of the gender gap varies considerably, even in per-hour pay, depending on the occupation. “Individuals in some occupations work 70 hours a week and receive far more than twice the earnings of those who work 35 hours a week,” she finds. “But in other occupations they do not.” Women with an MBA or a law degree are among the losers in the former case; they are likely to see their hourly earnings decline and then languish below those of men after they become mothers and cut their hours. Women techies and pharmacists, on the other hand, can take time off or reduce their hours but still be able to make close to the same amount per hour as their male colleagues.

The pay gap is especially wide in jobs where value is placed on the hours and job continuity of workers.

Why would some occupations be more punitive to women (or men for that matter) “who want fewer hours and more flexible employment?” Making use of a young field with the ominous title “personnel economics,” Goldin concludes that the gap is especially wide in jobs where value is placed on the hours and job continuity of workers. The reasons should be pretty obvious. When client X has been working with lawyer Y on a complicated deal and needs a quick response to a sudden crisis, he may just decide to take his business elsewhere if he hears Ms. Y has taken the afternoon off for her daughter’s swim meet. Mothers in law and business are less likely to get the Fortune 500 accounts than their always-available, mostly male counterparts. They will also earn less. The more prestigious the firm, the more powerful the client, the more contact is prized—and the bigger the wage gap.

Conflicts between a demanding client and personal life are not as likely to confront the tech employee who can finish a project after the kids go to bed or the pharmacist whose colleague can easily fill in for her. Due to the impersonal nature of the work, women techies will make close to what their male colleagues do whether they work at Yahoo or in the IT department at Macy’s. Surprisingly, given the field’s macho reputation, women with tech degrees are more likely to be in the labor force than, say, women with J.D. or MBA degrees. Lady pharmacists are also a happy group: because the person filling a prescription is “substitutable”—pharmaceutical procedures and drugs have become more standardized—hours can be flexible.

Goldin’s conclusion—that the key to further “gender convergence” is more flexibility in industries where there is little—seems logical at first sight. But her own description of the reasons certain occupations require longer, continuous hours undermines optimism on that score:

If an employee is unavailable and communicating the information to another employee is costly, the value of the individual to the firm will decline. Equivalently, employees often gain from interacting with each other in meetings or through random exchanges. If an employee is not around that individual will be excluded from the information conveyed during these interactions and has lower value unless the information can be fully transferred in a low cost manner.

It’s not at all clear how a hedge fund manager or Skadden Arps partner can make these facts go away. Nor is it apparent how much employees in high-stakes fields, not to mention the self-employed, can become as “substitutable” as pharmacists are, something that the Henry Lee Professor of Economics at Harvard, with decades of uniquely targeted research, must surely know. That means men and childless women will probably continue to dominate the upper echelons of law, business, politics, and other prestigious fields.

Even when hours are as flexible as Elastigirl, mothers still work fewer hours and earn less money than fathers.

But perhaps the major problem for the future of gender convergence is one that Goldin glides past entirely: even when hours are as flexible as Elastigirl, mothers still work fewer hours and therefore earn less money than fathers. Forty percent of pharmacists who are mothers work part-time. (Goldin doesn’t give part-time numbers for fathers, but government data suggest it’s quite a bit lower.) Among full-timers, too, male pharmacists work more hours than female. In other words, even when women earn the same hourly pay as men, they will make less according to the Labor Department’s averages publicized by the media.

Reporters have already highlighted Goldin’s promise of flex time as an answer to the gender gap. It might help, and, regardless of its impact, giving employees the flexibility to combine work and family the way they see fit—when feasible—has to be a good thing. But more flex time or no, we’ll be seeing the persistence of an official gap for as long as there are headlines.