Possible Path to Closing Pay Gap

By Sendhil Mullainathan
May 10, 2014

Its 2014, and women are still paid less than men. Does this suggest that a gender pay
gap is an unfortunately permanent fixture? Will it still be with us in 50 years? I would
predict yes. But by that point, it will be men who will be earning less than women.

My forecast is based on evidence from schools, where it has been easier to work toward
a level playing field than in the workplace.

Academically, girls have not merely caught up with boys in performance: they have
overtaken them. In a study issued last year, and using data from 2000 to 2009, the
economists Nicole M. Fortin, Philip Oreopoulos and Shelley Phipps found that 20.7
percent of female high school seniors had an A grade-point average, versus 14.7
percent of boys. In 2012, more than 70 percent of high school valedictorians were girls.

The trend extends into college. One study of Florida public colleges, by the economists
Dylan Conger and Mark C. Long and covering the years 2002 to 2005, found that
women had higher grade-point averages and were also more likely to stay in school. And
the Harvard economists Claudia Goldin and Lawrence F. Katz also show in their book,
The Race Between Education and Technology, how times have changed. They report
that by the age of 30, a man born in 1945 was roughly 50 percent more likely than a
woman to have completed college but that men born from 1960 to 1975 were less
likely to complete college than women. For the group born in 1975, the gap was nearly
25 percent.

Whenever educational opportunities are made available on a relatively equal basis for
females, Mr. Katz told me, they tend to excel in completion and grades with some field
differences.

As opportunities equalize in the workplace, will we also see a reversal of the gender pay
gap?

One reason to think its possible arises from why boys underperform in school in the
first place. The prime suspect for this underperformance is boys shortage of what social
scientists call noncognitive skills. They have trouble sitting still, focusing and exerting
self-control. Brian A. Jacob, an economist at the University of Michigan, found in a
study published in 2002 that boys behavioral problems explain a substantial share of
womens advantage in college enrollment. One paper drove home this point by showing
that girls outperform boys on tests requiring preparation, but not on those measuring
aptitude.

Employers demand these same noncognitive skills. Those that it takes to succeed in
college time management, writing ability, structuring tasks on your own, working in
teams are also needed in the modern workplace.

Despite my crisp prediction, there are two reasons to believe that the trend seen in
schools may not translate to the workplace. First, some evidence points to other gender
differences in psychology. Laboratory experiments many by the economist Muriel
Niederle of Stanford show that men fare better in competitive environments, in part
because they are more confident. (Yes, overconfidence can be a help in such
environments.) Even when a man and a woman perform equally well in a task say,
solving math problems men are more willing to enter competitions based on that
task. Men also show less risk aversion.

These differences competitiveness, overconfidence and risk-seeking could
conceivably have greater benefits in the workplace, at least in some jobs, than they do in
school.

A second factor is that jobs and society are still structured for traditional gender roles.
Family commitments and household responsibilities will not disappear. Closing or
reversing the gender gap, as Ms. Goldin noted in her presidential address to the
American Economic Association, must involve alterations in the labor market, in
particular changing how jobs are structured and remunerated to enhance temporal
flexibility.

It will also require change in social norms and identities, as the economists Marianne
Bertrand and Emir Kamenica, at the University of Chicago, and Jessica Pan, at the
National University of Singapore, have shown. They have found that if a woman is likely
to earn more than her husband, based on a statistical prediction model, she is less likely
to work outside the home. And when she does work and earn more, the marriages are
less happy and more likely to result in divorce.

For the gender gap to reverse, these norms or, at least, womens responses to them
would have to change. Ms. Bertrand notes that in Asia, where gender norms are
particularly strong, successful women are opting out of traditional family structures to
focus on work. Rates of marriage and fertility are particularly low for successful Asian
women. Of course, this may not be the way we would like to see norms change.

Ultimately, no one can predict with certainty the future of the gender gap; there are
simply too many uncontrollable variables. But, clearly, the current debate is missing
something.

If the pay gap leads us to consider men to be more productive than women, the
schooling gap should symmetrically lead us to consider the opposite. Perhaps it is
women who are more productive. If womens choices such as taking time off to rear
children make them less productive in the economy, does adolescent boys behavior
in school make them even less so, because they are missing the educational potential of
their formative years?

Maybe we shouldnt be asking when women will catch up. Maybe theyve already caught
up, and we should instead ask whether society is holding them back.