Here’s a quote from the Salt Lake Tribune’s article today about the gender wage gap in Utah:
On average, Utah women who work full time made 70 cents on the dollar compared with Utah men last year. That is the fourth biggest wage gap in the country — and is about 8 cents per dollar worse than the national average, according to new estimates in the Census Bureau’s American Community Survey .
This number — 70 cents on the dollar for women compared to men — is often used to suggest that women face discrimination in the labor market. While women may indeed face discrimination, this number doesn’t tell us much about whether that’s true. The issue with the raw number is that it’s not making an apples-to-apples comparison of men and women. Yes, women make less on average, but women also make different choices, on average. A person who has spent his/her entire adult life in the labor market will probably acquire lots of valuable skills, and competition among employers for those skills will drive that person’s wage up. A person who hasn’t spent his/her entire adult life in the labor market will probably not acquire the same level of valuable skills, and competition among employers for those skills won’t drive that person’s wage up to the same degree.
If men are more likely to work their entire adult lives than women (which they are), then we’d expect men to earn more on average even if the labor market is completely blind to gender.
Given this logic, it’s entirely unsurprising that women in Utah would earn less relative to men than women in other states. Another note from the 2010 Census in today’s Tribune states
Utah also has the lowest percentage of children under age 6 where all parents are working, 51.8 percent compared to a national average of 64.9 percent.
Women in Utah spend, on average, more of their lives on non-market, home production, and this reduces the time they spend acquiring the skills that are valued by the market.
The trick for labor economists doing statistical analysis is to do as much of an apples-to-apples comparison as possible. That is, we’d ideally like to compare a man and a woman who made exactly the same choices with respect to occupation, education, and investment in skills, and see if there’s a gender wage gap between those two.
It turns out that as you control for more and more of the “different choices on average” made by men and women, the gender wage gap gets smaller. But it doesn’t go away. For more, have a look at this article from Francine Blau and Lawrence Kahn, two leading labor economists who write frequently on this topic.
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