Freakonomics and the Gender Pay Gap

The January 7, 2016 Freakonomics Podcast was titled, “The True Story of the Gender Pay Gap.” It began with several similar quotes from recognizable names in the media, stating that women make “78 cents for every dollar that a man makes.”

Freakonomics looked a little deeper into this statistic and found some interesting conclusions. It is true that, long ago, businesses/bosses were upfront racist or sexist in their treatment of employees, but that overt unfair treatment is not as prevalent today. What, then, is to blame? Where is the smoking gun? Are men inherently sexist and that alone has suppressed women’s role so much that they earn just 78% of what men earn in the same job?

It isn’t that simple. Much of this podcast was a chat with Claudia Goldin, Harvard Economics professor. She stated how many of the jobs that women have taken have more “temporal flexibility,” which are jobs that don’t have the rigid time requirements, which result in lower total wages when compared to less flexible jobs. There is also a natural occupational segregation in our society, where men and women self-select certain jobs because of that flexibility, which leads to underrepresentation of genders in many occupations. Goldin said that, when you compare a man and a woman both fresh out of graduate school and equally brilliant, if they both take the same job, their salaries will be nearly the same. What changes, however, is a decade later when the woman has a baby and chooses to take a job that has more temporal flexibility, that choice comes with a consequence, which is typically a job that pays less money.

Stephen Dubner, the podcast author, asked Goldin if there was anything that could be done to equal the field for men and women in our society. Goldin said that the best legislation that could be enacted is a change in the school system and the paternity leave for men. She said that, when schools let kids out at 3pm, some parent is going to have to make a sacrifice (usually in their jobs) to be there for the kids. That has usually been the female.

I thought this was an interesting look at the social justice issue of gender equality that was worth summarizing. Here’s the podcast