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The Institute for Women’s Policy Research (IWPR) just released a study called “The Gender Wage Gap: 2012,” here’s the opening paragraph and their main finding:
“In 2012, the ratio of women’s to men’s median weekly full-time earnings was 80.9 percent, a decline of more than one percentage point since 2011 when the ratio was 82.2 percent. This corresponds to a weekly gender wage gap of 19.1 percent for 2012. Women’s median weekly earnings in 2012 were $691, a marginal decline compared to 2011; men’s median weekly earnings were $854, a marginal increase compared to 2011.”
As is typical for these types of “studies,” there is no attempt by the IPWR to control for any of the many important factors that would have an impact on wages such as: age, marital status, and having children, and IPWR only compares average weekly earnings by gender. The chart above shows some wage differentials by gender after crudely controlling for some of those important wage-determining factors (one at a time), based on the BLS report “Highlights of Women’s Earnings in 2011” (data for 2012 are not yet available), here’s a summary:
1. Without controlling for any of the demographic variables that would contribute to wage differentials by gender, women working full-time in 2011 earned 82.2% of men’s earning, on average. But statistically, that comparison is meaningless, because it violates the ceteris paribus condition of “holding everything else constant.” In other words, it’s an “apples to oranges” comparison of wages by gender with no economic value.
Here’s what happens once we start controlling for various factors that impact wage differentials by gender:
2. Once we control for just the single variable “marital status” and compare men and women who have never been married, we find that single, never-married women working full-tine in 2011 earned almost 97% of single, never-married men working full-time. Therefore, more than 80% of the raw, unadjusted gender pay gap of 17.8% disappears after we control for just that one variable – marital status.
3. Likewise, if we look at a broader group of single, full-time workers that include “never-married, divorced, separated, and widowed persons” with no children under 18 years of age, we find that women earn 96% of their male counterparts in that cohort.
4. For workers who are married (with spouse present) and working full-time, women’s earnings fall to 77.6% of their male counterparts in this cohort group.
5. For full-time workers who are married (with spouse present) and have children between 6 and 17 years of age, women earn only 73.8% of their male counterparts.
BLS data on full-time workers show that age, marital status, and motherhood have statistically significant effects on earnings, so that any unadjusted comparisons of earnings by gender (e.g. women earn 17.8% less than men, on average) are meaningless. Younger women (age 20-24 years), never-married women, and single women with no children under 18 years of age earn only 3.1% to 6.8% less than men, which is a lot less than the 17.8% unadjusted earning differential comparing averages. In a more comprehensive analysis that controlled for all relevant variables that affect wages (age, marital status, education, occupation, number of children, number of hours worked per week, number of years of continuous-uninterrupted work experience, work environment, risk of occupational fatality or injury, etc.), it’s highly likely that we would find that full-time female workers earn the same as their male counterparts, ceteris paribus.
Case in point: One study found that single, young (under the age of 30), childless female workers in America’s large cities earned 8% more on average in 2010 than their male counterparts, and the wage gap in favor of single, young women was as high as 21% in Atlanta and 20% in Memphis.
Bottom Line; “Studies” on earnings differences by gender like the most recent one from the IWPR that only compare average wages by gender, and don’t account for the important demographic factors that contribute to earning differentials by gender (age, marital status and children) really can’t be taken seriously.
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