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Furthermore, women earn less per hour at every education level, on average.As shown in Figure A, men with a college degree make more per hour than women with an advanced degree.To quote Goldin: Another way to measure the effect of occupation is to ask what would happen to the aggregate gender gap if one equalized earnings by gender within each occupation or, instead, evened their proportions for each occupation.
But these adjusted statistics can radically understate the potential for gender discrimination to suppress women’s earnings.
This is because gender discrimination does not occur only in employers’ pay-setting practices.
This minor adjustment allows for a comparison of women’s and men’s wages without assuming that women, who still shoulder a disproportionate amount of responsibilities at home, would be able or willing to work as many hours as their male counterparts.
Examining the hourly gender wage gap allows for a more thorough conversation about how many factors create the wage gap women experience when they cash their paychecks.
In other words, even though women disproportionately enter lower-paid, female-dominated occupations, this decision is shaped by discrimination, societal norms, and other forces beyond women’s control.
Why it matters, and how to fix it: The gender wage gap is real—and hurts women across the board by suppressing their earnings and making it harder to balance work and family.
As a thought experiment, imagine if women’s occupational distribution mirrored men’s.
For example, if 2 percent of men are carpenters, suppose 2 percent of women become carpenters. After controlling for differences in education and preferences for full-time work, Goldin (2014) finds that 32 percent of the gender pay gap would be closed.
However, leaving women in their current occupations and just closing the gaps between women and their male counterparts occupations (e.g., if male and female civil engineers made the same per hour) would close 68 percent of the gap.
This means examining why waiters and waitresses, for example, with the same education and work experience do not make the same amount per hour.