Economics of Liberty

Top Economist Breaks Down the Truth About the Gender Wage Gap

Guy Bentley

The 17 percent gender pay gap is almost entirely due to age, marriage and the different hours worked by men and women, according to a top economist at the American Enterprise Institute (AEI).

The Bureau of Labor Statistics (BLS) annual report on the “Highlights of Women’s Earnings” shows women’s in full-time work median earnings were 83 percent those of men.

The National Committee on Pay Equity claims this pay-gap emerges “in part because many women and people of color are still segregated into a few low-paying occupations.”

But AEI economist Mark Perry says one reason the wage-gap appears is that men work more hours than women. More than quarter of men in full-time work clocked in 41 or more hours per week in 2014, whereas the same could be said for only 14.8 percent of women. On the more extreme end, men were two and a half times more likely than women to work 60 hour weeks.

Using the BLS’s own data, Perry estimates that the average work week for full-time employees was 41.5 hours for women and 43.3 hours men. Working more hours gives men a significant advantage, earning more money and becoming attractive prospects for promotion.

The idea that the gender-wage gap is largely due to discrimination is further strained when single workers who have never married are taken into account. Among this demographic, women earned 93.7 percent of what men earned in 2014– meaning the wage gap dropped from 17 percent to 6.3 percent. This means that just one variable out of many wipes two-thirds of the gender pay gap, says Perry.

The decision to have children also bears a huge impact on women’s earnings vis-a-vis men’s earnings. Perry looked at full-time single workers with no children under 18 and found women’s median weekly earnings is 94 percent of their male peers– significantly less different than the headline figure of 83 percent.

There is also a substantial differential between the earnings of married men and married women, with women earning 78.6 percent of what men earned in 2014.

“Once again, we find that marriage and motherhood have a significantly negative effect on women’s earnings; but those lower earnings don’t necessarily result from labor market discrimination, they more likely result from personal family choices about careers, workplace flexibility, child care, and the number of hours worked,” says Perry.

Perry’s analysis agrees with analysis by research fellow Kate Andrews of the conservative Adam Smith Institute, who writes that the purportedly 14.2 percent gender pay gap in the United Kingdom is a platform for “manipulated statistics” and fosters a “victimhood mentality.”

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