Bolotnyy and Emanuel use human resources data for 3,011 bus and train operators working for the Massachusetts Bay Transport Authority (MBTA) in Boston. This workplace is interesting in that:
Seniority in one’s garage is the sole determinant of workplace opportunities, a feature enshrined in the collective bargaining agreement that covers all MBTA bus and train operators.3 Conditional on seniority, male and female operators face the same choice sets of schedules, routes, vacation days, and overtime hours, among other amenities.So, if the gender pay gap is apparent in MBTA jobs (having controlled for seniority), it can't be because of discrimination. As the authors note:
...the major explanations [for the gender wage gap] cluster into four categories: Women tend to work in lower-paying jobs; women have less experience; women face workplace discrimination; and women may be less willing to fight for better compensation. Our setting allows us to rule out all of these explanations for the earnings gap that we observe.Bolotnyy and Emanuel find that:
...despite having such a controlled setting, the MBTA still has a gender earnings gap: female operators earn $0.89 for each male-operator dollar in weekly earnings...
Mechanically, the earnings gap in our setting can be explained by the fact that male operators take 1.3 (49%) fewer unpaid hours off and work 1.5 (83%) more overtime hours per week than their female counterparts. Female operators’ choices indicate that they value time outside of work more than do male operators and that they have greater demand for schedule predictability and controllability.In other words, the gender pay gap exists in this job, and it arises because of the different work choices of men and women. However, that's not the end of the story:
While female operators take fewer overtime shifts than male operators, the driver of this difference is overtime opportunities that arrive on short-notice and therefore demand that operators are flexible about when they work. When overtime is scheduled the day before or the day of the necessary shift, male operators work almost twice as many of those hours as female operators. In contrast, when overtime hours are scheduled three months in advance, male operators sign up for only 7% more of them than female operators.So, women are less flexible in their ability to take on additional overtime hours at short notice. Specifically, they show that women are less likely to accept overtime shifts on days when they are not already working, and on weekends. And there's more:
When it comes to overtime hours worked, unmarried female operators with dependents work only 6% fewer of them when they are preplanned 3 months in advance, but about 60% fewer of them when they are offered on short-notice. Unmarried women with dependents also take the largest amount of unpaid time off with FMLA [Family Medical Leave Act], making them the lowest earners in our setting.I don't think anyone will be surprised to learn that one of the biggest factors explaining that women do not take overtime hours at short notice is having dependents (usually, children). Societal expectations around the childcare responsibility of women are driving their 'choices' here, making them less flexible in their ability to take short-notice overtime, and contributing to the gender wage gap.
If overtime is a big contributor, one way to reduce the gender wage gap would be to reduce the amount of overtime. The MBTA did try reducing overtime (although their goal was to reduce costs and increase efficiency, rather than anything to do with the gender wage gap):
In an effort to reduce absenteeism and overtime expenditures, the MBTA implemented two policy changes: one that made it harder to take unpaid time off with FMLA and another that made it harder to be paid at the overtime rate. While the policy changes reduced the gender earnings gap from 11% to 6%, they also decreased both male and female operators’ well-being.Reducing the gender wage gap came at a cost to both men and women. So, the gender wage gap exists even when discrimination would not be possible, but reducing the gap would come at a cost to everyone. A relevant question then is, how much cost would society be willing to bear, in order to reduce the gender wage gap? That's not an easy question to answer (in the same way as the similar question of how much cost society is willing to bear in order to redistribute income more generally).
[HT: Marginal Revolution, back in late 2018]
Read more:
Yes, a couple of amazing data sets have come to light. Goldin showed the gender pay gap disappears for MBA professionals when hubby earns less.
ReplyDeleteUnfortunately by controlling for seniority another channel is missed. By choosing to work fewer overtime hours etc, women are less likely to be promoted to senior positions. This will drive an additional gap that is unaccounted for.
ReplyDeleteThe seniority was purely determined by tenure, so decisions about working more/fewer hours didn't factor into it. That was one of the nice aspects of this study.
DeleteAlso the gap reduction attempt is about cost cutting, not reducing the gap. Had they adjusted hourly rates to compensate workers for lost overtime, it would not have come at a cost to women, the cost to men would have been minimised and there would be no loss in average well-being, perhaps even an increase. It's a poorly designed policy. The study should have recognised the reallocation of surplus to the employer, not only the redistribution to employees.
ReplyDeleteYes, the policy change was about cost cutting. The researchers didn't have any control over the policy change, of course. It answers a question about whether it would be worthwhile to curb overtime in order to reduce the gender wage gap, given that overtime appears to be a major contributor to it. In this case, I think you'd want to be very careful about how you went about it.
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