Pay Equity Empirical Inquiries (1989) / Chapter Skim
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7. Occupational Segregation, Compensating Differentials, and Comparable Worth
7. Occupational Segregation, Compensating Differentials, and Comparable Worth
Pages 153-176
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From page 153... ...
On the other hancl, to the extent that sex (differences in occupational structure and earnings arise from differences in individual productivity or choices, (lespite equal labor market opportunity, interventions to change either employment 2The dissimilarity index is roughly equal to the percentage of workers who would have to change jobs in order to create an equal distribution of the sexes in all jobs.
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From page 154... ...
have observed that women and men in the labor market have substantially different personality patterns with respect to such characteristics as empathy and aggression, which may lead to PAY EQUITY: EMPIRICAL INQUIRIES different job choices an(l, consequently, different reward structures.3 Differences in Utility Functions Men and women may make rational choices in the job market based on differences in utility functions that create differing preferences for certain types of work and other (luties. For example, some evi:lence in(licates that women attach greater importance to various forms of attractive working conclitions and that men place relatively greater emphasis on incomes (Forgionne and Peters, 1982; Harvey, 1986; Murray an(l Atkinson, 1981~.
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Discrimination If lower wages for one group are not the result of lower productivity and are not fully compensated by nonwage aspects of the job, the labor market is not in equilibrium and members ofthe group receiving lower wages should move into higher wage occupations. The absence of such equilibrating movement (and thus a stability over time in the extent of occupational sex segregation)
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From page 156... ...
PAY EQUITY: EMPIRICAL INQUIRIES ANALYTIC FRAMEWORK This paper investigates the extent to which there exist (differences in the wages paid in various occupations that are not related to levels of effort and responsibility, working conditions, or the productive characteristics of incumbents in them, but which are related to the sex composition of the occupation. Much recent work has applied a similar procedure to micro-level data, regressing inctiviclual wages on personal characteristics and the percentage of women in an individual's occupation.7 Studies such as England (1982, 1985)
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From page 157... ...
Although some recent empirical work has suggested that the available instruments that could be used to "solve" this problem in the context of compensating differentials studies are so poor as to render it impossible to reject statistically the accuracy of the OLS estimate, such a conclusion would raise serious questions were such studies to become the basis for legal actions rather than academic research. Fourth, it is important to recognize that unless the hedonic wage equation is strictly linear in all its regions, there is no reason that returns to various factors should be the same for different groups even if wages for both were determined by a common function.
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From page 158... ...
Fi8Thus, the results presented here miss any of the substantial changes in the labor market status of women that have occurred since 1980. PAY EQUITY: EMPIRICAL INQUIRIES nally, since the typical imputation of experience as age minus years of schooling minus six is not particularly useful for women, average levels of experience for women were~ computed for each occupation using the National Longitu(linal Surveys (NLS)
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before total labor incomes and average wages were calculated. i4Census data cannot be adjusted for the fact that the typical longer work week of men means that more of them are likely to have hit statutory limits requiring the payment of overtime.
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Adding Demographic and Personal Characteristics The first row of Table 7-1 shows the estimated effect of a job's being 100 percent female on the wages of full-time workers in that job if no other characteristics of either the worker or the job are taken into account. The most standard adjustment is to recognize that men and women do not, on average, bring the same levels of productive attributes to the labor market.
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From page 161... ...
The fourth row of Table 7-1 contains estimates ofthe gentler impact from an equation constrained to include the variables discussed in the previous section plus the job characteristics that maximized the adjusted R2 of the linear hedonic wage equation for men and women combined (since there were slight differences in the set that was entered for the sexes separately)
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The impact of adjusting for compensable job characteristics is striking. Once compensating differentials for a iob's effort responsibility, fringe benefits, and working conditions are taken into account there is no significant relationship between an occupation's gender composition and its wages for either men or women.
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aResults are from an estimating equation that combines men and women. Changes in Sex Composition To what extent are mobility patterns of women consistent with a labor market moving toward an equilibrium resulting in equality of wages?
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Blau, Francine 1984 Occupational segregation and labor market discrimination.
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New York: Academic Press. 1982 The failure of human capital theory to explain occupational sex segregation.
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1985 Occupational segregation: A defense of human capital predictions. Journal of Human Resources 20 437-440.
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for (Standard Errors) for Meanb (Standard Variablea Women Men Deviation)
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(.42) Job requires a temperament for .31 .98 .38 dealing with others (DOT)
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(.39) LABOR MARKET CONDITIONS Worker is afraid of what might -.33 -.56 3.18 happen if he quit job (1-5 (.14)
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81 .89 NOTE: The dependent variable is the average wage for all full-time, full-year workers in each occupation. aVariables are from a 1980 Bureau of the Census data tape (5 percent sample)
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From page 171... ...
The dependent variable throughout is mean occupation-leve} earnings, converted to an annual full-time earnings equivalent. In Parcel's framework, occupational incomes reflect four types of factors: an occupation's intrinsic "worth," labor market conditions specific to an occupation, the human capital of the occupation's incumbents, and aspects of social organization that are not reflected in productivity differences.
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From page 172... ...
In combination, Parcel interprets her results as indicating not only that dimensions of social organizations are important, but that there exists a richer array of these dimensions than simply the fraction of the workers in a job who happen to be women. My criticisms of Parcel's paper relate to the interpretation of the factors, the worth variables, and the social organization variables.
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From page 173... ...
Given that, the same generic question can be raised: What do we learn about the causes of the remaining sex (lisparity by inclucling a variable measuring the proportion female? As long as male wage distributions lie above women's (a fact that nobody disputes)
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Filer argues that this result shows that comparable worth is a solution for a problem that floes not exist. Most of the female-maTe wage gap that remains after productivity and job characteristics are taken into account can be attributed to within-occupation sex differences.
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From page 175... ...
The problem, of course, with this interpretation is that there is so much sex segregation that men and women may not really be in the same jobs, even when occupations with the same percent female are considered. Thus, Filer's interpretation that much ofthe problem is wage differences within occupations may be inaccurate, though the mechanism he describes in the final section of his paper (the movement of wom en into occupations in which the level of pay is higher and the female-male pay gap is lower)
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