A gender analysis of U.S. labor market policies for the working poor

Current anti-poverty policy proposals focus on welfare reform to the exclusion of reforming the low-wage labor market. In contrast, we compare two policy proposals aimed at low-wage labor markets: a national comparable worth policy and an increase in the minimum wage. With both policies we pay specific attention to their impact by gender. Our findings suggest that while both would reduce poverty among working women, the impact of a comparable worth policy on female poverty would be greater under most scenarios presented. It is estimated that an increase of 96 cents per hour in the national minimum wage would be necessary to equal the poverty reduction effect for women workers of a comparable worth policy which excludes small employers. Both policies decrease the incidence of povertylevel wages less among men, since roughly 60 percent of minimum wage workers are women. Additionally, not only would a national comparable worth policy improve the economic status of low-waged women workers, it would also narrow the gap between male and female poverty. While an increase in the minimum wage would also reduce this gap, comparable worth would virtually eliminate it.     

金融发展与地区实体经济资本配置效率-来自省级工业行业数据的证据

职位隔离是形成性别收入差距的重要机制.本文构建一个引入了职位晋升机制的收入差距分解方法,利用2006年中国综合社会调查数据,考察了职位隔离对性别收入差距的作用,且在统一的模型框架内识别和估计了职位内工资歧视(同工不同酬)和晋升歧视的程度.研究结果发现,女性过多地集中于职位"金字塔"结构的底层.尽管职位晋升的工资效应不存在显著的性别差异,但约41%的性别收入差距是由于职位隔离导致的.工资歧视是职位层级内部性别收入差距的主要来源.与之类似,职位晋升歧视能够解释1/4的性别收入差距.因此,除了同工同酬政策,促进职位晋升的机会平等是缩小性别收入差距的重要措施,意即"同酬"还需"同工".     

Comparable worth in a decentralized labour market: the case of Ontario

Abstract.  We document the application of pro‐active pay equity legislation to the private sector of the Canadian province of Ontario in the early 1990s. We report substantial lapses in compliance among smaller firms where the majority of men and women work. We also find that the pay equity law had no effect on aggregate wages in female jobs or on the gender wage gap. This experience provides unique perspectives on (1) the tensions between the workings of a decentralized labour market and the principles of comparable worth and (2) the obstacles to its extension to the private sector. JEL classification: J7, J3     

NEGLECTED WOMEN AND OTHER IMPLICATIONS OF COMPARABLE WORTH

Comparable worth proposals presume that the gender wage gap is a result of occupational segregation. The proposals argue that females are channeled into "women's jobs" and that overcrowding depresses women's wages below the "value" of the work performed. Comparable worth legislation proposes replacing the idea of equal pay for equal work with a principle of equal pay for different work of comparable worth determined by job evaluations. Such job evaluations are feasible only for the public sector and large private employers. The analysis in this paper recognizes that comparable worth wage adjustments are to be limited to the large employers. It examines how employers in the covered sector tend to alter their pay packages and hiring standards. Comparable worth legislation also affects wages in the uncovered sector populated by small employers. The rationing of women's jobs and the changes in hiring standards for men's jobs in the covered sector tend to redound to the benefit of smart, energetic women and dull, indolent men.     

PAY EQUITY AND COMPARABLE WORTH

An important and emerging public policy consideration… generally called equal pay for comparable worth…has received great attention from those who influence or report public policy initiatives. The comparable worth movement is directed at pay equity issues, primarily between men and women. The source of controversy surrounding comparable worth concerns the mechanism for determining wages in the economy…either an unrestricted market process or a subjective valuation process by designated "pay equity experts." Although the pay and allocation mechanisms and their side effects are controversial, other important questions concern the actual method of equity determination to be used in implementing comparable worth. This paper analyzes, from a general public policy perspective, many of the issues and much of the evidence surrounding comparable worth initiatives.     

Does Equal Pay Legislation Reduce Labour Market Inequality?

This paper considers a labour market model of monopsonistic competition with taste-based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality. When the taste for discrimination is small or competition is weak, the policy removes job segregation and the wage gap completely. However, with a bigger taste for discrimination or stronger competition, equal pay legislation leads to more job segregation, and sometimes minority workers end up earning less than before. Profits of discriminating firms might increase, and discrimination can persist in the long run, although it would have disappeared without the policy.     

The poverty experience of lone mothers and their children

Lone mothers, as sole caregivers and women, face unique challenges to guaranteeing the economic well-being of their children compared to lone fathers. While all lone parents face a trade-off in time spent earning wages and time spent caring for children, mothers are likely to earn wages lower than fathers, thus increasing their chances of falling into poverty. Using data from the U.S. Census Bureau’s 2013 Current Population Survey, we estimate the size of the gender poverty gap among lone-parent families. We apply the Oaxaca–Blinder decomposition to assess whether this gap can be solely attributed to parent and family demographics. Much of the poverty gap, however, is attributed to unobservables, suggesting the increased likelihood of being in poverty for lone-mothered families may be, in part, due to gender-based discrimination in labour markets.     

Assessing the Possible Antipoverty Effects of Recent Rises in Age‐Specific Minimum Wages in New Zealand

Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low‐income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one‐tenth of a percentage point.     

Sex Differentials in Earnings in the South Korean Labor Market

We examine gender differences in earnings among South Korean workers in 1988 – the year the South Korean National Assembly enacted the Equal Employment Opportunity Act. Using the "88 Occupational Wage Bargaining Survey on the Actual Condition," we calculate women's mean earnings as a percentage of men's mean earnings by major industrial category and educational attainment. We find a larger wage gap among clerical and sales workers than production workers or professionals. Generally, the more education a woman has, the smaller the gap between her earnings and those of her male counterparts. Women with a middle-school education have a mean income 53.5 percent that of comparable men, while the female-to-male wage ratio among college graduates is 76.1 percent. We analyze wage differences separately for women and men. Following Ronald Oaxaca's (1973) work, we decompose male–female wage differentials. We also calculate a discrimination coefficient. Our work shows that, all else equal, men earn from 33.6 percent to 46.9 percent more than women with comparable skills. We attribute the difference to gender discrimination.     

Self-Employment and Wage Earning in Hungary

This paper examines the earnings determinants of the self‐employed and wage earners in Hungary in the mid‐1990s, taking into account two forms of selection: selection into working or non‐working for every individual in its sample and selection into self‐employment or wage‐earning jobs for workers only. Previous studies use switching regression to examine the returns to individual characteristics, taking into account only selection into self‐employment or wage‐earning jobs. The authors find that the estimated returns to individual characteristics when accounting for both forms of selection, differ from estimates correcting for only selection into self‐employment or wage‐earning jobs. They also find that the earnings determinants of the two sectors are not significantly different from each other.     

COMPARABLE WORTH: SOME ISSUES FOR CONSIDERATION

The comparable worth approach is a radical departure from market determination of wages. This paper considers some economic issues pertinent to the comparable worth dialogue and focuses on implications of comparable worth legislation at the state and local levels. We show that current sex differentials in wages could reflect voluntary labor supply choices and/or discrimination. We also discuss the reverberations of comparable worth and note that some women in an occupation targeted with a wage increase could be made worse off as a result of employer cutbacks. We discuss why state or local officials may be hesitant to adopt comparable worth and also offer possible explanations for their being receptive to it. The intent throughout is to provide a balanced discussion that will aid individuals in taking an educated stand on the issue.     

Minimum Wage: Does it Improve Welfare in Thailand?

We study the causal impact of the minimum wage on labor market outcomes, household consumption, inequality and poverty in Thailand by relying on policy variation in minimum wages over time across provinces. We find that minimum‐wage increases have a large and significant impact on the likelihood of working in the uncovered sector among workers with elementary education. However, the impact is very small and insignificant among other labor market groups. In contrast, the minimum wage has large positive effects on the formal sector wages of low‐earning workers, such as the young, elderly and low educated. Increases in the minimum wage are associated with reductions in household poverty and consumption inequality at the bottom half of the distribution.     

“COERCIVE COOPERATION”? ONTARIO'S PAY EQUITY ACT OF 1988 AND THE GENDER PAY GAP

Evaluating the effect of pay‐equity laws is important and yet difficult as one needs to deduce what would have occurred without the policy intervention. We use a new tool, synthetic‐control method, to examine the effects of Ontario's Pay Equity Act on the gender pay gap. This tool enables us to create a “Synthetic” Ontario, which resembles Ontario more closely than does any other single province. Using Synthetic Ontario to compare what actually happened in Ontario to what would have happened, we find that the act has had little or no effect on the female‐male wage gap in Ontario. (JEL J7, J3)     

GENDER DISCRIMINATION ESTIMATION IN A SEARCH MODEL WITH MATCHING AND BARGAINING*

This article develops a search model of the labor market with matching, bargaining, and employers' taste discrimination in which—under necessary but standard distributional assumption—it is possible to separately identify gender discrimination and unobserved productivity differences. The equilibrium shows that both prejudiced and unprejudiced employers wage discriminate. Maximum likelihood estimates on CPS data indicate that half of the employers are prejudiced, average female productivity is 6.5% lower, and two‐third of the gender earning differential may be explained by prejudice. An affirmative action policy is implemented resulting in a redistribution of welfare from men to women at no cost for employers' welfare.     

The Effect Of Statistical Discrimination On Black–White Wage Inequality: Estimating A Model With Multiple Equilibria*

This article presents the structural estimation of the parameters of a statistical discrimination model. Although the model is capable of displaying multiple equilibria, an estimation strategy that identifies both the model parameters and the equilibrium selected by the economic agents is developed and empirically implemented. A comparison between the selected equilibria and the other potential equilibria reveals that the decline in wage inequality experienced in the U.S. economy cannot be attributed to changes in the equilibrium selection. Nonetheless, a counterfactual experiment shows that in a color‐blind society blacks' wage would have been on average more than 20% higher.     

The macroeconomics of the equal pay act

This study uses simulations based on 1980 U.S. Census data to estimate the economic disruption that would occur if the wages of women and men were adjusted according to the principles of equal pay for equal work as set out in the Equal Pay Act of 1963. Disruption is measured by the effect such wage adjustments have on the macroeconomic variables of nominal Gross National Product and unemployment. A range of government policy options which could be used to ameliorate the impact of these adjustments in earnings is also examined.     

SOME REFLECTIONS ON COMPARABLE WORTH

Despite its somewhat impudent tone, this paper examines a major controversy. "Comparable worth" has its proponents and detractors, but as in most debates, neither side fully appreciates the maintained hypotheses of the other. From an economic point of view, the disagreement seems to boil down to differences of opinion about whether the "excessive supply" of women to "women's jobs" is a result of their different utility functions or of their different constraints. There also has been a serious confusion of the "normative" with the "positive," some oversight of the potentially large regulatory costs that would accompany comparable worth legislation, and a tendency to consider only the partial-equilibrium consequences of these measures. Each of these considerations is examined in detail, with the conclusion that while comparable worth measures might alleviate some inequities in the short term, the long-term consequences could seriously aggravate the very problem the policy was intended to solve.     

Labor markets and mating markets: Using taxes to reduce the male–female pay gap

Recently, Frank and McKenzie (J Bioecon 8(3):269–274, 2006) pointed out that beside discrimination, there is a further reason for a wage gap between males and females: If females value partner wages more than males in the mating market, this would increase the pay gap. In this paper, it is analyzed whether there exist policies that may improve the position of females and males from a distributional point of view without destroying the signal females want about the labor market success of males. First-best redistribution policies require the knowledge of the male and female wage preferences. Because this information is not available, a first-best redistribution policy seems infeasible. As an alternative policy, a differentiated wage tax is considered which is less information demanding than a first-best policy. It is shown that a welfare increasing wage tax scheme does exist and that an adequately chosen wage tax scheme may decrease the gender wage gap without destroying the desired signal of wages for labor market success.     

Male–female wage discrimination in Chinese industryInvestigation using firm‐level data1

We use firm‐level data to analyze male–female wage discrimination in China's industry. We find that there is a significant negative association between wages and the share of female workers in a firm's labour force. However, we also find that the marginal productivity of female workers is significantly lower than that of male workers. Comparing wage gaps and productivity gaps between men and women, we notice an intriguing contrast between state‐owned enterprises (SOEs) and private firms. The wage gap is smaller than the productivity gap in SOEs, while the converse is true for private firms. These results suggest that women in the state sector receive wage premiums, whereas women in the private sector face wage discrimination.     

The Redistributive Effects of a Minimum Wage Increase in New Zealand: A Microsimulation Analysis

This paper examines the potential effects on inequality and poverty of a minimum wage increase, based on a microsimulation model that captures the details of household composition and the income tax and welfare benefit system and allows for labour supply responses. Results suggest that, largely due to the composition of household incomes, a policy of increasing the minimum wage has a relatively small effect on the inequality of income per adult equivalent person, and a money metric utility measure, using several inequality indices. Hence, the minimum wage policy does not appear to be particularly well targeted, largely due to many low wage earners being secondary earners in higher income households, while many low income households have no wage earners at all. These results are reinforced when allowing for wage spillovers further up the wage distribution. Nevertheless, a minimum wage increase can have a more substantial effect on some poverty measures for sole parents in employment.