Minding the Gender Wage Gap

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Greatly under-estimated in the 1980's, the gap in wages between men and women has decreased sharply over the past three decades. A new University of Georgia study reveals that the gap shrank more dramatically than previously recognized.

The research, published in the March edition of the journal Social Science Research, is one of the first to take into account a common bias that the authors argue has skewed previous results: People (especially men) tend to inflate their incomes when surveyed. Conversely, both men and women tend to underestimate income when reporting on someone else’s behalf. According to the UGA researchers, these biases, combined with changes over time in the proportion of men and women who report their own earnings, have obscured the decline in the gender wage gap.

The traditional estimation method, in which data from self-reports of income are combined with so-called proxy reports from others without any adjustment, indicates that the wage gap closed by 16 percent from 1979 to 2009. After removing gender-specific reporting effects, the UGA researchers find that the gap closed by 22 percent over the same period—a difference of nearly 50 percent.

“It appears that the gender wage gap has closed more quickly over time and by a greater amount than previous estimates suggest,” said study co-author Jeremy Reynolds, associate professor of sociology in the UGA Franklin College of Arts and Sciences.

Reyolds and his co-author, Jeffrey Wenger from UGA's SPIA, note that self-reporting leads the most accurate estimates of the wage gap, presented in this graph that accompanied the study.

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Gender disparities and under-representation continue to plague American boardrooms as well governmnent at every level. Only 22% of all state-wide elective executive office positions are currently held by women. Ninety-two of the 276 members who have ever served in the United States Congress are current Members - 75 in the house and 17 in the Senate. Equal compensation for equal work is one of the cornerstones of building a meritocracy where the public interest is at stake. As they do in so many instances, the business community's ability to anticipate and lead in this area will be the key to sustainable success, especially as they seek to attract the best candidates for all positions - from entry level to the executive suite.

Graph courtesy of the study's authors.

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