The Gender Income Gap: Thinking Out Loud

I’ve been thinking about the gender income gap recently and there is an idea that popped into my head. I’m not claiming it is true, but I was hoping I could get some feedback and maybe start a discussion. Without further ado, here is the model:

There are 2 types of jobs: Blue collar and white collar. White collar jobs require a college education, (which is itself expensive) blue collar jobs do not. Your income in blue collar jobs will depend upon your “physical ability”. Your income in white collar jobs will depend upon your “mental ability”. Men and women are distributed in a comparable manner on the mental ability scale. However, men have an advantage on the physical ability scale. Mental and physical ability are not correlated. Blue collar jobs pay on average less than white collar jobs. If you subtract the cost of the college education, there is substantial overlap in the returns of white and blue collar jobs.

So let’s crank through the model and see what happens. If you have low mental ability, you get a blue collar job. If you have high mental ability, you go to college and get a white collar job. Now let’s imagine you have middling mental ability. If you have high physical ability, the blue collar job will give you a higher return once you factor in the cost of college. If you have low physical ability, the white collar job will give you a higher return.

So what would that mean for a gender income gap? Well, since men are more likely to have high physical ability than women, the middling mental ability men will become blue collar workers while the middling mental ability women will become white collar workers. So if you look at the income distribution and control for education, women will have a lower average income in both blue and white collar jobs (no college and college) since the average woman in both groups has a lower level of the demanded ability.

This idea was sparked by the fact that women are now more educated than men in many fields. Unless women and men have different ability distributions, that means the mean ability of college women has to be lower than the mean ability of college men. The why that would be the case was provided by an article I read regarding longshoremen. You can make a lot of money with that kind of a job. But it requires physical strength that is much more common among men than women.

It’s quite possible I’m not the first person to think of something like that. I also don’t have empirical evidence and I’m not sure how this story could be tested. Finally, even if my model is correct, I doubt that’s the whole story. I hope I get some feedback.

PS: Before this comes up. I’m not saying that women are less intelligent than men or that blue collar workers are stupid. If you think I wrote the first, re-read and you will see that I am simply saying that men and women face different incentives which means that they will have different ability distributions in groups in which they self-select. I also am using the term “mental ability” as a shortcut for a very complex set of skills which basically make you successful in white collar jobs but are of limited use in blue collar jobs.

This entry was posted in Economics and tagged , , . Bookmark the permalink.

17 Responses to The Gender Income Gap: Thinking Out Loud

  1. happyjuggler0 says:

    Sounds good as far as it goes, although (I hate saying this, but I will anyway) if you say this in certain circles you will get lambasted because you aren’t saying it is all discrimination. Everything that follows is based on logic, not on any papers that I am aware of:

    With that out of the way, in the same vein, it is worth pointing out that over half of high school graduates at least start college these days (in the US anyway), and that women attend at a high rate than men do. For argument’s sake assume that both men and women have a bell curve for intelligence and academic work effort in grade school, and that they are identical for both men and women.

    With those facts/assumptions, the mean average intelligence and effort for women attending college will be lower than men, because there will be more women on the left side of the bell curve than men attending college.

    Lower average in both intelligence and effort would be enough for entering college freshmen to earn more on average than women after college, but add in however much their actual education is worth (as opposed to the signaling of their diploma), and that will also add up in men’s favor.

    So in the absence of differences in ability of K-12 students of both men and women, and in the absence of discrimination in school or in the workplace (i.e both are meritocratic), and with over half of HS graduates going to college, and with more women going to college than men, then pure logic seems to compel an outcome where more male college students go on to out earn their female counterpoints.

    In closing I will make the same qualifier that you did and say that this doesn’t mean that I think men are either smarter or more studious (as a group) than women are; indeed by my assumptions listed above they are equal.

    • Steven says:

      The trend that has more women in college is very recent. The wage gap has been around forever. In fact, the wage gap is decreasing as women become the majority with degrees, so the data says the exact opposite of your story. The forces you describe are probably at play, but the wage gap is decreasing DESPITE them (they are new) – it certainly doesn’t exist BECAUSE of them.

      If 50 years from now the wage gap is 5%, then this would be a good story for why it is there.

      I hear stuff like this a lot and I wonder – how do people put so much effort into rationalizing a wage gap in a way that doesn’t involve discrimination without taking the effort to look at the data? It’s available. What is logical about spinning stories in your head and never once taking the time to see if they match the facts?

  2. Phil says:

    Nice, never thought of that. The logic works, as far as I can tell.

    Here’s a test: if it’s true, then there should be equal numbers of men and women for any (higher) level of white-collar competence — since the extra women only serve to fill out the bottom of the white-collar workers.

    In fact, there should be MORE women at the top of the white-collar achievement list, because some of the men who would be high achievers in white-collar would instead choose blue-collar (athletes, cops, etc.).

    • happyjuggler0 says:

      “In fact, there should be MORE women at the top of the white-collar achievement list, because some of the men who would be high achievers in white-collar would instead choose blue-collar (athletes, cops, etc.).”

      All else being equal.

      For example, most people, both men and women, don’t actually want to put in the insane number of hours to possibly become CEO some day. Those hours come out of your personal life, and that seems to be even less appealing to men than it is to women in general, especially when they have children.

      So if I am right in that hypothesis, there will still be a lot more men than women who are white collar high achievers.

      • happyjuggler0 says:

        Sigh. “men” and “women” should be reversed in the following sentence:

        “Those hours come out of your personal life, and that seems to be even less appealing to men than it is to women in general, especially when they have children.”

      • Phil says:

        Agreed. However, you could still check for jobs that don’t require an insane number of hours … government jobs, for instance. At the very least, you could see if fixed-hour jobs (like, say, office clerk) show less of an effect than indeterminate-hour jobs (like, say, law).

  3. thetawavesii says:

    “If you have low mental ability, you get a blue collar job.” Don’t tell that to my mechanic.

  4. thetawavesii says:

    Mental versus Physical: My brother was a good athlete, but an average student. I was an A student and was athletic as well, cycling 10-20 miles per day to get to school and work. He achieved MVP status for playing football in high school, I achieved 100lbs for my 5′-6″ frame, which made me a target for every horny male in town. My brother won an NROTC scholarship worth $20,000 (in 1965.) I won $100 for being the best artist in the school. He lost his NROTC scholarship by getting his girlfriend pregnant. But his coach got him a full time permanent office job that paid enough for him to buy a house in Silicon Valley for $19,000. That house tripled in value to more than $60,000, allowing him to move to a bigger and better house with acreage. He then applied for law school, because his wife wanted to be married to a lawyer. It took him three tries to pass the bar, but he did finally pass. His second house had tripled in value again, which allowed him to move to a bigger, grander house on a hill with horses and a vineyard. Now, my high school boyfriend was a spectacular athlete, far better than my brother, but he was not white, so no coach in the 60’s would get him a full time office job paying enough to buy a house in Silicon Valley. Now, according to my brother, God punished me for loving a black guy – (God tends to prefer blond babies) and all of his financial success is attributable to God’s grace. No matter that I was a better student and equally good athlete. So, the moral to the story is that (according to over half – mostly the right half – of the population represented by my brother) it doesn’t matter how mentally or physically superior you are, society has it’s preferences – otherwise known as prejudices, and “God” seems to agree.

    • PrometheeFeu says:

      First, as I said, this is a model. That means it’s a stylized description of causal relationships and not a description of reality that will apply perfectly to every case. It’s not meant to be individually predictive.

      Second, it’s meant to speak about the modern labor market. I don’t think it would fit the 1960s very well. There was plenty of gender discrimination as well as other factors which depressed women’s incomes. I’m simply pointing out that in the modern world, remaining income disparities could be the result of something other than discrimination. I’m sure there is still some amount of discrimination, but I am finding less and less persuasive the idea that women today are victims of widespread discrimination in the professional world and that it accounts for a perceived income gap.

      • thetawavesii says:

        I can never make up for the prejudices of the past that left me impoverished, nor can my daughter, who is equally talented and athletic. I do give the civil rights movement credit for changing things, but that would never have succeeded if not for (“big”) government strong enough to counteract regional bigotry.

        • PrometheeFeu says:

          I am sorry that you were a victim of prejudice. The civil rights movement was indeed a great thing and it did a lot of good. Chief among its achievement was combating the intrusive government action which forced discrimination on private businesses that wanted nothing to do with the irrational practices.

      • thetawavesii says:

        BTW, the income gap is not just “perceived” – it is based upon empirical data.

        • PrometheeFeu says:

          The size of the gap ranges from the touted “70c for every dollar a man makes” to close to nothing depending upon how you slice it and what variables you control for. (career interruptions, what work is performed, etc…)

          • thetawavesii says:

            My statistics come from Wikipedia, which of course may not be the best source, but they are referenced. I do want to commiserate with you, however, dear PrometheeFeu, on prejudices aimed at men in general, which while they are based upon, as you point out, historical norms, are largely and often mitigated by education and other social advantages. Many people still raise their daughters to expect that a man will “take care of them,” a standard which in my experience went away with my parents (WW2) generation. I still point out to my 90 yr old mother that men do not feel required to support their wives anymore. In fact, in my generation, I have not yet found a man who believes as my father did, that it was his duty to support the family. Much of the inequality was mitigated, in fact, by WW2 itself, since it produced a generation of women who saw first hand that they could handle “men’s jobs.” My mother, who was more educated than my father, worked as a draftsman during WW2, and thus understood that she could support the family better than my father could. However, she opted not to, and had 8 children instead, which pretty much obliterated any dreams of a career. Pointing out to her that it was her “choice” to have so many kids just lands me in hot water, not only with her but with my 7 siblings who think that I wish they never had been born. My father, a devout Catholic, gladly took all of the credit/blame for siring 8 kids. My mother generally was allowed to believe that she was completely cleared of any responsibility. I used to whisper that we were all the result of immaculate conception. The other thing that WW2 did was to produce, through the GI Bill, a generation of educated fathers – unthinkable before the war. But then again, dear P, that was the result of “big government” meddling in people’s lives again.

  5. thetawavesii says:

    BTW, there is a very interesting study that results in more women being chosen for orchestral positions in “blind” trials.

  6. Yogi says:

    I’m afraid your “blue collar” job definition is several decades, or a few centuries, old. Even then, sewing, serving or cleaning chores were quite aptly done by women. Nowadays, assembling electronics or setting up machinery does not require physical strength or abilities out of women’s reach.

    Nice try, but I guess pure prejudice still is the best explanation.

  7. Steven says:

    The actual data paint a slightly different picture. Blue collar jobs do not as a rule require more physical labor. Labor intensive and more hazardous jobs pay more, which they should (otherwise why put in the effort / take the risk?) and men tend to fill these jobs. In effect, men get paid more at blue collar jobs than women because they work different types of jobs. This might have something to do with the trend that has a higher proportion of women attending college than men now, but who knows? I haven;t seen anything supporting that. So your model works as a really rough picture of this side of the market,.

    On the white collar side, though, men and women pursue (statistically speaking) very different degrees. Men are more likely to get degrees in engineering, physics, and to a lesser extent math, statistics, and economics. These degrees pay a lot more than english degrees and sociology degrees. Why do they sort that way? Culture, probably, I doubt there is a significant biological component, but there it is (Harvard presidents have been known to disagree). This has always been the case, even when women rarely went to school, so the idea that the wage gap for educated people is due to some blue collar / white collar sorting doesn’t agree with the data. Instead, it looks more like pre-market discrimination in the form of degree sorting. If you control for things like degree earned and years of experience, the wage gap diminishes greatly. Years of experience is big because women are much more likely to take time off of work to have kids.

    To claim that the remaining wage gap (after controlling for experience, field of study, etc.) is from intellectual sorting is a bit of a stretch. I think a better story is: for blue collar jobs, men are culturally more likely to be willing to take on risks and are on average stronger, so they tend to get paid more. For white collar jobs, pre-market sorting leads to men and women being funneled into different fields. Further, women are more likely to take time off to have kids, which hinders advancement. What remains could be ( I believe it is, but it’s hardly a fact) just plain ol’ discrimination. It’s a more complicated story, but for something like the gender wage gap, I think the devil is in the details.

Comments are closed.