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The Wage Gap Myth from the point of view of an accomplished statistician

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July 16, 2015
31 upvotes

Note: citations are at the bottom

The wage gap is an incredibly resilient myth that seemingly simply will not die. The claim has been thrown around over the years, that women make anywhere from 70% to 90% of what men make for the same job. For simpllicity's sake, I'm going to refer to the wage gap myth as stating that women make 80% of what men earn for the same job.

This is cut and dry misinformation. The root of this claim comes from the fact (which is true) that the sum of all money made in full time jobs earned by women divided by the sum of all money made in full time jobs earned by men is approximately .8. But this is not work in the same jobs and thus this is not a measure of wage discrimination.

Women work categorically easier jobs for a multitude of reasons. From the point of view of women in comparison to men: average hours worked are far fewer, death is less than a 15th as likely, hours are placed in more desirable times, workplace is placed in a more desirable location, a far greater share of compensation is taken in fringe benefits such as health insurance, and the list goes on and on.

These factors are what are known as omitted variables. And when they are neglected and incorrectly lumped into another factor, thus incorrectly warping that factor's measured effect, it is known as omitted variable bias. So what happens when we start removing these omitted variables? According to the department of labor, when we remove the variables with a simple and straightforward monetary translation, we get the "adjusted wage gap" of 4% to 7%. But those are only the variables for which we can comfortably assign a solid monetary value to, which means that the actual wage gap is further in women's favor, albeit more difficult to give an unbiased value by the omitted variable method. And that is why the department of labor states, "this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct." Following another study, pulling other omitted variables, in my opinion, more profound ones, the wage gap is actually reversed and women make 108% of what men earn.

But the 108% statistic still doesn't account for all omitted variables. And this issue extends to the rest of the world. In my research with the Demographic and Health Survey (I'll cite their website, but if you want to view their data, you have to submit a research proposal, so I doubt it's of use to anyone), we do exactly that -- my research isn't actually on the wage gap, but it's such a basic and trivial statistic that we see the numbers as we're looking to answer our much more complex questions. When one removes thousands of relevant variables by omitted variable bias, the coefficient for the dummy variable of male is negative in every single country, in every single year with available data. This is a better measure of wage discrimination than even the department of labor's cautious and conservative claim. By these findings, which anyone can go and check through the DHS website if they wish to go through the trouble (and it would be nice to have a few people do so just to corroborate my claim, heh), it must be concluded that men are ubiquitously discriminated against with regards to wage. And heavily so.

In addition to this, several years ago, the widely cited figure was 77%. Now, I'm seeing figures around 85% being more commonly cited. This is a huge problem. 8% in 2010 (derived from the 108% incomplete omitted variable model in the 2nd citation) was an underestimation of the discrimination men faced in wages. In a matter of 5 years, jobs do not shift dramatically. What can shift a lot is social and legal policy, which I believe has and is what almost solely accounts for the shift in cited figures from 77% to 85%. That would mean that women are being paid 85/77 times as much as they were in 2010 relative to men now. If the 108% figure was an underestimation, that means 119.22% is an underestimation now. Which means that I can safely and rationally conclude that men are being discriminated out of nearly a fifth of their pay on the basis of their genitalia. And that is wrong. And the way to fix this is to drop this idiotic myth that every statistician and economist has debunked countless times.

Department of Labor: http://www.consad.com/content/reports/Gender%20Wage%20Gap%20Final%20Report.pdf

Second Study: http://content.time.com/time/business/article/0,8599,2015274,00.html

Demographic and Health Surveys: http://www.dhsprogram.com/


Post Information
Title The Wage Gap Myth from the point of view of an accomplished statistician
Author Tyrantbreaker
Upvotes 31
Comments 2
Date 16 July 2015 02:53 AM UTC (5 years ago)
Subreddit antifeminists
Link https://theredarchive.com/post/709675
Original Link https://old.reddit.com/r/antifeminists/comments/3dgmao/the_wage_gap_myth_from_the_point_of_view_of_an/
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