Gender paycheck differences may surprise you--there's less to fret about than most people expect.

Do women really work for free until April 20 each year?  Maybe not--likely not!

For a long time the conventional wisdom has been that in the paycheck marketplace men make a lot money than women do.  If you are "up" on statistics typically bandied around, men have been reported to on average make about 25% more than women do; some numbers are smaller and for some the gap is larger, but that's essentially the expected difference between the incomes of men and women most people have grown to believe is true.

But those kind of percents are likely misleading--and not especially informative.  The simple reason for this is not all the complicated.  The average wage for men versus women really isn't a very useful nor informative statistic because of a couple obvious flaws--the averages for men and women cut across a lot of variation in jobs held and because men and women work different amount of time; men work longer hours whereas women fewer.  Thus, if you average the compensation for each gender, you're comparing, in effect, apples and oranges!  

One class of women actually get more than men!

When one limits the calculation to individuals who work 40 hours a week [or more], the pay gap shrinks in half, with women earning 87% of what men do.  When you control for other factors [i.e., beyond just working the same number of hours per week] even more of the gap vanishes.  Part-time status actually reverses the pay gap:  11% of employable men work part-time, in contrast to 41% of employable women.  When you consider the pay of men and women who work part-time--women get paid about three percent more than men!  

Other corrections are noteworthy:  When marital status is adjusted for, all but about a 5% differential is accounted for; controlling for urbanization of difference shows that young women earn a up to a 20% increase over their male counterparts!  

Because a fair proportion of women take leave from the workplace during childbearing years, they tend to, on average, offer less experience in subsequent years when they return--which is not helpful in correcting apparent discrepancies.  Even when comparisons takes place in the same profession, women frequently choose specialities that are different from men--and frequently less lucrative.  For example, historically in medicine the proportion of women choosing pediatrics over, say, orthopediac surgery reflects an earning potential that is very different, one from the other--yet both are classified as physicians.

Carefully examined, wage differences can go away almost entirely.

In a study of wage discrepancies among engineers sponsored by the National Science Foundation that sought to control for such factors as education, employment sector, region, specialty, highest degree attained, and years of experience--when experience alone was considered, paid differences between men and women shrank to negligible levels.  

A good overview of the topic ran last Friday in the Wall Street Journal by the "The Numbers Guy" Carl Bialik entitled "Not all differences in earning are created equal."  Many of these issues are raised and the conventional wisdom of huge discrepancies is called into question.

There's still differences that are hard to explain.

The quest for income equivalence isn't over, though.  Despite the increasing the apparent income parity between women and men, not all is fully understandable or easy to explain: Men with children seems to get on average, an earnings boost of about 2% according to GAO findings, whereas females with off-spring earn about 3% less than other females without children.  Go figure!    
_______________________________________________________________

To make sure you get a "tweet" with every new blog, follow "keithmurrayblog" on Twitter!  Think others might like to read this?  Re-TWEET it to your followers with the SHARE ARTICLE tab below!