Pay Equity Empirical Inquiries (1989) / Chapter Skim
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8. Comparable Worth and the Structure of Earnings: The Iowa Case
8. Comparable Worth and the Structure of Earnings: The Iowa Case
Pages 179-199
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From page 179... ...
In addition, we are able to determine whether the relationships between the state pay structure and such variables as market wages, educational attainment, and work experience are alterec] by the plans.
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From page 180... ...
Of those covered PAY EQUITY: EMPIRICAL INQUIRIES by a union contract, 8,800 were to receive pay increases an(l 5,000 were to receive pay cuts. We estimate that the cost of implementing this plan would have been $16.6 million, with the pay reductions.
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From page 181... ...
A fourth uncertainty in the comparable worth debate is how a comparable worth pay plan relates to market wages. Since the Iowa comparable worth study ignored market wages by construction, it should lower the impact of market forces on public sector wages.
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From page 182... ...
It is important that this analysis be performed in a way that isolates the impact of the change in the pay system without simultaneously allowing other factors to change. If, for example, implementation of the new pay structure causes some employees to quit and others to enter the state system, then a comparison of pay structures before and after implementation PAY EQUITY: EMPIRICAL INQUIRIES will be biased by differences in the sample of employees.
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From page 183... ...
to measure median market wages. For a few occupations for which national markets exist and for which Iowa data were limited, we used the median wage from the 1983 Current Population Survey (unpublishec]
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From page 184... ...
184 Cal o :^ .~ V)
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From page 185... ...
Female state employees were more likely to be concentrated in female jobs, as expected. The average value for "percent female job" was .78 for women and .22 for men.
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From page 186... ...
(The proportion female in the "100 percent female job" category differs slightly from 1.0 due to a 2-month mismatch between data sources.) As for the racial impact, the earnings gap between minorities and whites increased as a result of the implemente(1 pay plan, but it wouIcl have been only marginally affected by the proposed plan.
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From page 187... ...
This is not surprising in that variables such as market wages, education, and experience were given Tower weights under the comparable worth plans. It is easier to contrast the comparable 187 worth pay structures with the original 1983 estimates of Equation (21.
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From page 188... ...
1 Employment services -2s3 328 43.2 Regulation -612 318 16.4 Transportation -1,115 241 12.3 Tax/finance -1,226 22s 36.6 Computation -2,398 160 34.4
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From page 189... ...
relative to the 1983 plan by one-third on implementation. However, the Arthur Young pay plan woul(l still have retained a statistically significant relationship to market wages, with a 10 percent increase in the market wage associated with a 1.5 percent increase in state pay.
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From page 190... ...
degree Ph.D. degree License Vocational Military Tenure Tenure2 Experience Years out Supervisor Professional Full time Market wage Union contract Dues payer Assoc.
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From page 191... ...
By excluding market wages and including the percentage of female incumbents on the job, the coefficient estimates on the female (rummy variable in the pay-level regressions become positive but not significantly clifferent from zero, and the comparable worth plans actually appear to lower the relative pay for inclividual women. However, the coefficients on percent female incumbents in the job classification are negative and quite large in absolute value.
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From page 192... ...
Human Capital-Job Attributes Model As an additional sensitivity test, we reestimated the earnings equations by adding to our original model both the percent fe
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From page 193... ...
Nevertheless, it is important to keep in mind that these regressions will yield information on the changes in marginal returns to personal characteristics above and beyond the changes due directly to the formal comparable worth process of measuring and weighting job factors. Because personal characteristics are undoubtedly correlated with (and perhaps causally relatec]
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From page 194... ...
(.0023) Percent female job - .1459 .0016 - .0582 .1475 .0877 (.0070)
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From page 195... ...
Even controlling for the percent female job variable, the inclividual female variable is still negative and significant, albeit small in magnitude. The market wage response elasticities decTine in magnitude once the job factors are added.
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From page 196... ...
We should emphasize that our earlier estimates obtained from the human capital earnings equation yield more meaningful estimates of the gross gains to union members as a result of the comparable worth process in that the coefficients on union status include gains that resulted from the factor point system. Table 8-5 provides estimates of the net impact of union status after holding job attributes constant.
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From page 197... ...
, excluding percent female job Woe ~ .877 .957 .913 WF `~ .895 .959 .926 Was Adjusted for human capitaljob attributes newel (Table 8-5) , excluding percent female job We WF Was WE .918 1.007 .955 .965 .993 .986 Rows 2 and 3 of Table 8-6 show the female to male wage ratios controlling for the human capital mode!
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From page 198... ...
However, neither plan was so ra(lical as to eliminate totally a role for market wages, as measured in our regressions. Even after controlling for job factors and for the percent female, market wages and human capital variables stfl} significantly explain a proportion of the post comparable worth variations in pay rates.
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From page 199... ...
1986 Wage determinants: A survey and reinterpretation of human capital earnings functions.
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