The Equality Equation

April 23 1999 3:30 AM

The Equality Equation

What explains the disparity in male and female pay?

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2) The gap between the earnings of women and their productivity.

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3) The gap between the productivity of women and the productivity of men.

There is plenty of evidence that the first gap has been declining--fairly rapidly by historical standards. There is no good way to measure the gap between women's earnings and their productivity, but it is reasonable to say that their earnings have risen pretty much in line with their productivity. At least, it seems clear that the earnings of the total labor force have risen pretty much in line with productivity (output per hour of work) when measured correctly. Women are so large a part of the labor force that it is hard to believe that this could be true of the total if it were not also true of women. If the gap between the earnings of women and men is declining, and if the earnings of women are rising in line with their productivity, it follows that the productivity of women has been rising relative to the productivity of men. That would be consistent with what we know about changes in the character of women's education and their distribution among occupations.

Whether this combination of facts and speculation is grounds for demonstrations of protest is a matter of taste.

I think there is a problem lurking here, but it is not the one the protesters have been protesting. In an earlier age, when incomes in the market were lower than they are now, the cost to a parent of forgoing market employment in order to stay home and care for a child was also lower than today. And when the men-women wage gap was lower, the clear choice was for the woman to stay home and look after the child. But given higher market incomes, having and rearing a child is more expensive in terms of forgone income. And with the men-women wage gap narrowed it has become less clear how the staying home with the child should be divided between the mother and the father. This problem of family life is not a result of incomes being too low or the wage gap being too big. It is rather the reverse.

Herbert Stein, a senior fellow at the American Enterprise Institute, was chairman of the Council of Economic Advisers under Presidents Nixon and Ford. He died in September 1999.