Page 423 - The Principle of Economics

CHAPTER 19 EARNINGS AND DISCRIMINATION 431
women anticipated that they would be working at age thirty-five, yet when this group actually reached thirty-five, more than 70 percent of them were in the labor force. Their underestimation of future work activity surely influenced their early career preparations (or lack thereof). More recent survey data show a dra- matic change in expectations. The vast majority of young women now report an intention to work at age thirty-five.
Those changing work expectations are reflected in rising female enrollments in higher education. In 1960, women re- ceived 35 percent of all bachelor’s de- grees in the U.S.; by the 1980s, they received somewhat more than half of them. In 1968, women received 8 per- cent of the medical degrees, 3 percent of the MBAs, and 4 percent of the law degrees granted that year. In 1986, they received 31 percent of the medical de- grees and MBAs and 39 percent of the law degrees. This recent trend in school- ing is likely to reinforce the rise in work experience and contribute to continuing increases in the relative earnings of women workers. . . .
Despite the advances of the past decade, women still earn less than men. The hourly earnings of women were 74 percent of the earnings of men in 1992 when ages twenty-five to sixty-four are considered, up from 62 percent in 1979. At ages twenty-five to thirty-four, where women’s skills have increased the most, the ratio is 87 percent.
Economist Barbara Bergmann and others attribute the pay gap to “wide- spread, severe, ongoing discrimination by employers and fellow workers.” But dis- crimination cannot be directly measured. Instead, researchers estimate the extent to which differences in productivity ap- pear to explain the gap and then attribute the rest to discrimination. Such a conclu- sion is premature, however, when pro- ductivity differences are not accurately measured, which is usually the case.
For example, data are seldom avail- able on lifetime patterns of work experi- ence, and even less material is available on factors bearing on work expectations and the intensity and nature of work in- vestments. As these are still the key sources of skill differences between men
and women, there is considerable room for interpretation and disagreement.
When earnings comparisons are re- stricted to men and women more similar in their experience and life situations, the measured earnings differentials are typi- cally quite small. For example, among people twenty-seven to thirty-three who have never had a child, the earnings of women in the National Longitudinal Sur- vey of Youth are close to 98 percent of men’s....
It is true that women and men still do not have the same earnings. But I believe that the differential is largely due to con- tinuing gender differences in the priority placed on market work vs. family respon- sibilities. Until family roles are more equal, women are not likely to have the same pattern of market work and earnings as men. Technology has reduced the burden of housework, but child care remains a responsibility that is harder to shift to the market.
SOURCE: The Wall Street Journal, October 7, 1994, p. A10.
with a greater proportion of white players. One interpretation of these facts is that customer discrimination makes black players less profitable than white players for team owners. In the presence of such customer discrimination, a discrimina- tory wage gap can persist, even if team owners care only about profit.
A similar situation once existed for baseball players. A study using data from the late 1960s showed that black players earned less than comparable white players. Moreover, fewer fans attended games pitched by blacks than games pitched by whites, even though black pitchers had better records than white pitchers. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.
Another study, published in the Quarterly Journal of Economics in 1990, ex- amined the market prices of old baseball cards. This study found similar evi- dence of discrimination. The cards of black hitters sold for 10 percent less than the cards of comparable white hitters. The cards of black pitchers sold for 13 percent less than the cards of comparable white pitchers. These results suggest customer discrimination among baseball fans.