Repeat after me: There is no gender pay gap

by Sonny Bunch on October 30, 2012

Remember the presidential townhall debate? It happened in the long long ago before the Sandymonster laid waste to the Eastern seaboard. There was a question about the gender pay gap that elicited a bit of controversy after the fact. But no one focused on the most important aspect of her question: The stat she was citing is total and utter crap.* Just pure nonsense.

Andrew Biggs, from AEI, shows just how nonsensical the claim is in this post. He is discussing a new gender gap study that purports to show that new female college grads earn 82 cents for every dollar a man earns. He gives the study’s organizer’s credit for applying a variety of controls that suggest the gap is only seven cents. But then he dives deeper:

But in preparing for an NPR program discussing the study, I ran some quick numbers using data from the Census Bureau’s American Community Survey. I limited myself to full-year private sector workers with a bachelors degree who were ages 21 to 26 in 2009-2010. Within this group I controlled for age, race, Hispanic and immigrant status, detailed geographic location, weekly work hours, college major and occupation. Controlling for college major accounts for the fact that men tend to choose majors that lead to higher earnings later in life. Controlling for occupation captures “compensating wage differentials” for positive or negative aspects of the job. For instance, dangerous or unpleasant jobs may pay more, while jobs offering flexible hours or more generous benefits might pay less. Including all these controls, the gender pay gap for young college grads drops to around 1 percent.

Repeat after me: There. Is. No. Gender. Wage. Gap. Certainly not one serious enough to necessitate massive government interference in the pay markets and handouts to trial lawyers in the form of the Lily Ledbetter Act.

*Everyone also ignored the fact that, while reading off of an index card, Ms. Fenton got the percentage wrong. She wasn’t just asking a BS question about a BS stat: She got the BS stat entirely wrong. While reading off of a card. She said women were paid only 72 cents for every dollar a man makes; the (entirely BS) stat is 78 cents on the dollar. But whatevs. Oddly, Candy Crowley didn’t jump in to correct Young Ms. Fenton’s errors. She saved her fact-checking skills for later on.

{ 1 comment… read it below or add one }

Joe October 30, 2012 at 3:21 pm

It’s too late, we’ve already lost this one. All we can do is remember that if you allow the other side to define the debate, you’re probably going to lose it.

Reply

Leave a Comment

Previous post:

Next post: