| Abstract: | Human capital theorists claim that the gender wage gap is due in large part to supply-side factors. They base this claim on empirical evidence. This paper challenges the interpretation of that empirical evidence. It argues that that interpretation is based on an assumption of a simplified production system that rules out any consideration of institutionally-based demand-side discrimination. It argues that insiders have an incentive to choose production techniques that benefit themselves, and that their choices will bias measures of human capital in their favor. The paper then considers a specific case study - the undergraduate U.S. academic market - where such institutionally-based demand-side discrimination exists, and offers an institutional change which could work to offset it. |
