On Wednesday, I wrote a post about how much of the gender wage gap depends on cultural differences. It turns out that, at least in the market for top executives (and especially CEOs), cultural differences explain a large part of the gender wage gap that remains after you control for age, tenure, job title, year, and industry, as well as a number of firm characteristics. However, the underlying idea that cultural differences matter is questioned in this 2016 working paper by Charlotta Stern (Stockholm University), which was subsequently published in 2017 as a book chapter here.
Stern's target is really the sociological study of gender in the labour market, but I suspect that she sees the underlying argument as applying more broadly. In particular, she critiques sociologists' preference for explaining differences in labour market outcomes between men and women as arising from cultural differences, rather than innate biological differences or differences in preferences. Stern concludes that:
The left-feminists’ domination of gender sociology has resulted in a strong norm to explain differences between men and women only in terms of culture, broadly defined, and to ignore or gloss over biological or preference explanations, and hence to interpret differences in outcome as resulting from socialization into gender roles or to discrimination of various sorts. The taboo is kept in place by a groupthink mentality where it seems scholars fear that even a slight dissension from the constructivist view would cause expulsion and charges of anti-feminism...
Applying Stern's argument to the cultural differences paper I discussed on Wednesday would suggest that there are important omitted variables in the analysis of gender differences in wages, being biological differences, and differences in preferences. However, both of these omitted variables are problematic (or at best unhelpful) for developing an understanding of gender differences in wages.
The biological differences argument is problematic in a pragmatic sense, because gender differences in wages are tautologically entirely explained by biological differences (if we conveniently ignore the social construction of gender). So, there would be no statistical way to feasibly disentangle any other contributors to gender differences in wages, after controlling for biological differences. Gender differences in wages would be entirely explained by biological differences.
Stern's argument in favour of considering preferences as separate from cultural differences is problematic for a more theoretical reason. Preferences are themselves socially constructed. Stern argues that there are evolutionary differences in preferences, but the evidence in favour of that assertion is relatively weak. It is difficult to take seriously a theory where the implication is that a significant proportion of people's preferences being fixed and determined at birth. And it would fly in the face of real-world experience, where our preferences for things (including occupational and work preferences) change over time, in response to external influences such as our family situation, our peers, and the prevailing norms of the society we live in. That is, our preferences are determined by culture. So, accounting for differences in preferences between genders would simply be accounting for cultural differences in a different guise.
Neither biological differences nor differences in innate preferences offers a policy solution to gender wage differentials. Therefore, one implication of Stern's critique is that, because such differentials are fully explained by factors that are not amenable to change, they not worth troubling ourselves over unless they offend us ideologically. I'm not usually in favour of staking out strong ideological positions (see here for more of my thoughts on ideology), but in this case, I feel like I would be on the right side.
[HT: Marginal Revolution, back in 2018 (the paper sat in my to-be-read pile for a while!)]
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