Work Life Balance

Why, Exactly, Do Women Earn Less Than Men?

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I studied economics in school and this meant several classes about gender and labor economics. I love labor economics and I was one of the few females who studied economics at my university, so I always found the topic interesting. One of the things that you hear about labor economics is that women earn significantly less than men. And this is true. But why? Is it discrimination? Well, some of it can be chalked up to just that. But there are many other reasons, too.

In the short video below, Prof. Steve Horwitz, the Charles A. Dana Professor and Chair Department of Economics at St. Lawrence University, goes through some of these reasons.

[youtube=http://www.youtube.com/watch?v=EwogDPh-Sow?version=3]

Some of it is obvious. But it’s still interesting. The last time I really talked about these things was in school, when career choices and childbearing were just theoretical issues as opposed to life events. As someone who chose a second career that pays lower than my first career, I see how career choices early on can have a profound effect on your lifetime income. I’m happy with my decision to become a reporter — elated, in fact — but I wonder if younger people shouldn’t be given a bit more information on how these career decisions can pay out over the long haul. For that matter, I’ve long held that women and men should be given much more information about how to effectively balance work and the rest of their lives. I was thinking extensively about it from a young age but I know many of my friends were not. A bit more flexibility or knowledge would probably be helpful for many.

Likewise, childbearing (to some extent) and childrearing (to a large extent) can also have profound effects on one’s wages and income. Because I get so much value from being at home with my children (indeed, I’m a bit melancholy about sending my oldest off to school tomorrow), I’m happy to reorder my professional life so as to get that time with my children. I would not trade this for the world. As in, I’m happy to keep up with my professional life and to earn money for the household, but even with very high pay, I wouldn’t be willing to do much more work than I do now. But having said that, there is a trade-off here. My income is not as high as it otherwise would be.

When you control for career choices and time spent out of the work force raising children, there is still a gap in wages, albeit a small one. And of course career choices and childrearing choices could be result of personal preferences (like mine) or sexist cultural expectations. Those are much more harder to quantify from a statistical standpoint.