In my last post, I began a series focused on the gender wage gap, and discussed why demonstrating its existence is not always a simple proposition. Most importantly, I argued, it is not enough to simply look at the difference between men’s and women’s median wages. Not only do these estimates tell us less than we might like (recall those overlapping margins of error), but their analysis also often ends up oversimplifying the conversation by providing only a comparison between all working men to all working women—not, ultimately, the comparison we really want to make.
This is because human capital—the abilities people bring with them into the workplace—and wage structure—the amount we compensate various jobs relative to others—affect how much we can reasonably expect people to be paid, as do some outside factors, such as when and where a worker is hired. In other words, there are plenty of reasons other than gender that could explain why two individuals working full time earn different amounts of money. In order to investigate the extent to which a worker’s gender influences his or her wages, we need to make sure we’re comparing workers who are similar in as many other ways as possible. Read Full Article →