Key facts about the gender pay gap–Pew Centre research
10 Jan 2015 Leave a comment
in discrimination, gender, human capital, labour economics, occupational choice Tags: gender wage gap, labour economics, sex discrimination
Thomas Sowell Dismantles Egalitarianism
09 Jan 2015 Leave a comment
in discrimination, gender, human capital, labour economics, occupational choice, Rawls and Nozick Tags: egalitarianism, Thomas Sowell
How big is the sexism problem in economics? This article’s co-author is anonymous because of it
07 Jan 2015 Leave a comment
in discrimination, gender, human capital, labour economics, occupational choice, politics - USA Tags: gender wage gap, reversing gender dao
Why is it assumed that economics is the best available choice for women with mathematical skill?
Just as many men as women qualify for engineering and science but more of these same women also qualify for law and medicine.
Why enroll in engineering, science or economics if you have qualified for law or medicine?
The Gender-Pay Gap Is Largest for the Highest-Paying Jobs – The Atlantic
18 Dec 2014 Leave a comment
in discrimination, gender, human capital, labour economics, labour supply, occupational regulation Tags: employer discrimi, gender wage gap, sex discrimination
Was Aaron Sorkin right? Hollywood discriminates? Sacrifices profit to indulge sexism?
17 Dec 2014 1 Comment

Women and Minorities in Human History
16 Dec 2014 Leave a comment
in discrimination, economic history, gender, labour economics, liberalism Tags: engines of liberation, gender, sex discrimination, The Great Fact
How New Zealand’s rich-poor divide killed its egalitarian paradise | Max Rashbrooke | The Guardian – a boy’s own fact check
13 Dec 2014 Leave a comment
in discrimination, gender, labour economics, poverty and inequality Tags: gender wage gap, Gini coefficient, poverty and inequality, top 1%
What is claimed to have gone wrong by the op-ed in The Guardian overnight?
A stark rich-poor divide, the OECD argued, had taken over a third off the country’s economic growth rate in the last 20 years. But how could this be?
The simple answer is that in the two decades from 1985 onwards, New Zealand had the biggest increase in income gaps of any developed country.
Incomes for the richest Kiwis doubled, while those of the poorest stagnated. Middle income earners didn’t do too well, either.
Are these claims true? That is, in the two decades from 1985 onwards, have the incomes of the richest Kiwis doubled, while those of the poorest stagnated and have a middle income earners not done too well either?
Figure 1 shows that prior to the recent recession starting in 2009, there were 15 years of steady growth in median household incomes. As will be shown, most of the period covered both by the op-ed in the Guardian, and by the OECD paper was an economic boom.
Figure 1: Real household income trends before housing costs (BHC) and after housing costs (AHC), 1982 to 2013 ($2013)
Source: Bryan Perry, Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2013. Ministry of Social Development (July 2014).
Perry (2104) found that net income gains from the mid-1990s to 2013 were similar for all income groups, so income inequality in 2013 was also similar to the mid-1990s – see Figure 2.
Figure 2: Real household incomes (BHC), changes for top of income deciles, 1994 to 2013
Source: (Perry 2014).
Importantly, in the OECD analysis, much was made of what was happening to the 40% income decile. As can be seen from figure 2, this decile gained as much as any other group in New Zealand from the income growth between 1994 and 2013.
The Gini coefficient in figure 3 , which years the most common measure of inequality, shows no evidence of a rise in income inequality since the mid-1990s. The trend-line of the genie coefficient in figure 3 is almost flat since the early 1990s .
Figure 3: Gini coefficient New Zealand 1980-2015
Source: (Perry 2014).
To make things more awkward, the large increase in income inequality in New Zealand in the late 1980s and early 1990s shown in figure 3 was followed by a 15 year economic boom after 20 years of economic stagnation – next to no income growth – as is shown in figure 4.
Figure 4: Real GDP per New Zealander and Australian aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1956-2013

Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics
The lost decades of the growth in the 1970s and 1980s were replaced with a long boom. Trend growth of 2% per year returned after this increase in inequality – see figure 4.
The gains since the economic boom since the early 1990s has been broadly based both up and down the income distribution and by ethnicity. As shown in figure 5, between 1994 and 2010, real equivalised median household income rose 47% from 1994 to 2010; for Māori, this rise was 68%; for Pasifika, the rise was 77%.
Figure 5: Real equivalised median household income (before housing costs) by ethnicity, 1988 to 2013 ($2013).
Source: (Perry 2014).
These improvements in Māori incomes since 1992 were based on rising Māori employment rates, fewer Māori on benefits, more Māori moving into higher paying jobs, and greater Māori educational attainment should be celebrated and consolidated. Māori unemployment reached a 20-year low of 8 per cent from 2005 to 2008.
As for the top 1%, as shown by Figure 6, their income share has been steady at 8-9% since the mid-1990s. It was only in the USA the top 1% share continued to rise strongly, from 13% to 19%.
Figure 6: income shares of the top 1% of earners, New Zealand, Australia and USA
source: Top incomes database
Over the last more than two decades in New Zealand, there has been sustained income growth spread across all of society. Perry (2014) concluded that:
Overall, there is no evidence of any sustained rise or fall in inequality in the last two decades.
The level of household disposable income inequality in New Zealand is a little above the OECD median.
The share of total income received by the top 1% of individuals is at the low end of the OECD rankings.
What is claimed as the causes of this growing rich-poor divide that is also slowing growth by a third?
Tracing the causes of a growing income gap is like trying to map earthquake fault lines – never a precise science – but it is hard to ignore the correlation between the timing of the increase and the country’s post-1984 political revolution.
Embracing reforms known elsewhere as Thatchernomics and Reaganomics with unprecedented enthusiasm, New Zealand halved its top tax rate, cut benefits by up to a quarter of their value, and dramatically reduced the bargaining power – and therefore the share of national income – of ordinary workers.
Thousands of people lost their jobs as manufacturing work went overseas, and there was no significant response with increased trade training or skills programmes, a policy failure that is on-going.
At the same time, New Zealand stopped building affordable houses in any serious quantity, forcing poorer households to spend ever-increasing amounts on rent and mortgages.
As will be recalled from Figure 4, the economic reforms in New Zealand were followed by a long economic boom starting in 1992 that only came to an end with the onset of the global financial crisis.
Figure 7 shows that from 1994, the proportion of the lowest income households spending more than 30% of their income on housing fell steadily, reaching 34% by 204.
Figure 7: Proportion of households spending more than 30% of their income on housing costs by income quintile, New Zealand 1988–2013 HES years

Source: Perry (2014)
Housing affordability was improving for much of the period in which the op-ed in the Guardian was claiming it was getting worse. The increase in housing unaffordability in the late 1980s and early 1990s coincided with a deep recession and a cut in welfare benefits.
Housing affordability has become an issue in New Zealand because of rising prices. Supply is not keeping up with demand.
There were considerable increases in prices throughout the house price distribution between 2004 and 2008. Median house price increasing by over 50% between 2004 and 2008; the price rises were largest among the lower price houses.
It was not a case of a decline in demand under the hypothesis that is put forward in the op-ed in the Guardian. For that hypothesis to hold, housing prices would somehow have to fall in the price range of ordinary workers. That is not the case.
Furthermore, the large increase in housing prices and decline in housing affordability occurred a decade and more after the increase in inequality in the late 1980s and early 1990s. The timing is out.
Another inconvenience for the rich poor divide hypothesis is during the housing price boom after 2004 rent to disposable income for all income quintiles remained relatively constant. Rents were stable.
Poorer households are more likely to rent, and therefore much less likely to be affected by the housing affordability crisis in New Zealand as that was mostly about home ownership.
Gender analysis! Gender analysis? Where is the gender analysis? Over the last 20 to 30 years, the gender gap has closed substantially in terms of wages and employment. Young women now outnumber young men two to one at university.

New Zealand has the smallest gender wage gap in the Western world. That is inconsistent with the notion in New Zealand has a rich poor divide. Instead New Zealand appears to be an egalitarian paradise as long as you are not a boy!

The major driver of inequality in New Zealand and overseas is the rising number of two-income households made up of two well-educated parents and one or two children and many more single parent households on low pay or no one in paid employment in the house. Well-educated couples form into high income households; fewer of the less educated marry and too many end up a single mothers.
Source: closertogether.org.nz
The main cause of poverty in New Zealand is dependency on welfare benefits and in particular the number of single parents. Child poverty in beneficiary families is 75% to 80%, much higher than in families with at least one adult in full-time employment (11% in 2012 and 2013). The payment of welfare benefits to families who do not work guarantees an income to people not in a job, but it creates incentives not to work.
The economic and sociological literatures overseas increasingly suggesting that skill disparities resulting from a lower quality education and less access to good parenting, peer and neighbourhood environments produce most of the income gaps of racial and ethnic minorities rather than factors such as labour market discrimination.
What is the main driver of a gender wage gap?
12 Dec 2014 Leave a comment
in applied welfare economics, discrimination, gender, labour economics, liberalism, organisational economics, personnel economics

Claudia Goldin’s pollution theory of sex discrimination
10 Dec 2014 Leave a comment
in discrimination, gender, human capital, labour economics, labour supply, occupational choice Tags: Claudia Goldin, co-worker discrimination, credentialisation, employer discrimination, occupational segregation, sex discrimination, signalling
Claudia Goldin argues that it is difficult to rationalise sex segregation and wage discrimination on the basis of men’s taste for women in the same way as discrimination based on race or ethnicity. Goldin developed a pollution theory of discrimination in which new female hires may reduce the prestige of a previously all-male occupation.
When work took more brawn than brain, the distributions of skills and natural talents of men and women were further apart. Women were not as physically strong as men. This counted for more both before the Industrial Revolution and at the height of the Industrial Revolution when most factory work involved a considerable amount of brawn.
As machines substituted for strength, as brain replaced brawn and as educational attainment increased, the distributions of attributes, skills and natural talents narrowed by sex.
Because there is asymmetric information regarding the value of the characteristic of an individual woman, a new female hire may reduce the prestige of a previously all-male occupation.

Prestige is conferred by some portion of society and is based on the level of a productivity-related characteristic (e.g., strength, skill, education, ability) that originally defines the minimum needed to enter a particular occupation. People had to have a minimum amount of the socially prestigious strength or skill before they are hired.
Male fire fighters or police officers, to take two examples, may perceive their occupational status to depend on the sex composition of their police station or firehouse. These occupations are socially prestigious because of the strength and courage of police and fire-fighters. Men in an all-male occupation might be hostile to allowing a woman to enter their occupation even if the woman meets the qualifications for entry.
A reason for this hostility of the existing male members of the occupation is the rest of society may be slow to learn of the qualifications of these female newcomers. Their entry against this background of ignorance in the wider society may downgrade the occupation as still carrying prestigious characteristics such as physical strength. As Goldin explains:
Because they feel that the entry of women into their occupations would pollute their prestige or status in that occupation. Very simply, some external group is the arbiter of prestige and status.
Let’s take an example of firemen, and let’s say we begin not that long ago when there were no women who were firemen—which is why they’re called firemen.
And to become a fireman you have to take a test, lifting a very heavy hose and running up many flights of stairs. And every night, the firemen get off from work and go to the local bar.
Everyone slaps them on the back and says what great brawny guys they are and what a great occupation they are in, and everybody knows that to be a fireman requires certain brawny traits and lots of courage.
But nobody knows when there’s a technological shock to this occupation. And in this case it might be that fire hoses become really light or the local fire department changes the test. There are information asymmetries. But they do note that for this “brawny” characteristic, the median woman is much lower.
So if we observe a woman entering the occupation and we don’t know how to judge women, we’re going to assume that her skills are those of the median woman. Or it may be that we can observe something having to do with her muscles and that may up it a little bit.
But chances are we’re going to assume that some technological shock has happened to this occupation. And so her entry into the occupation is going to pollute it.
Then when they go to the bar, people will say, “oh you’ve got a woman in the firehouse; now fire fighting has become women’s work.” That’s where the pollution comes in.
Union rules also played a role in preventing the entry of women into some occupations
Many occupations have changed sex over time e.g., librarians, bank tellers, teachers, telephone operators, and sales positions. New occupations and industries are less like to be segregated on the basis of sex because they have not developed a social image regarding the prestige of workers.
Occupational segregation came to an end because credentialisation, which spreads information about individual women’s productivities and shatters old stereotypes, can help expunge this pollution of the prestige of specific occupations and jobs both within the industry and in wider society .
The visibility successful women today and in the past may help shatter old stereotypes and increase knowledge about the true distribution of female attributes in this prestigious occupation.
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Goldin found that when typists were primarily men, it was claimed that typing required physical stamina so woman need not apply.
But later, when the occupational sex segregation reversed, when typing became a female occupation, it was said that typing required a woman’s dexterity, which men did not have! When I was at school, only women were taught to type.
How Some Women Benefit From Marrying a Man Who Makes Less Money – The Atlantic
09 Dec 2014 Leave a comment
in discrimination, gender, labour economics Tags: asymmetric marriage premiumClick add, gender wage gap, power couples, sex discrimination
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The large and growing gap is not due to timid female MBAs.
Some of it is attributed to different skills, jobs before the MBA, and that male business students typically take more finance classes and women more marketing classes.
But a majority of the difference is due to women taking time out of the labor force and then working less after having children.
Women without children usually don’t take time off, and most of their earnings disparity with men can be explained by differences in their skills.
It’s notable that the earnings of some women did not fall very much after they had children and any drop in income did not persist after a few years.
But these women often had a “lower” earning spouse (income under $100,000). A large and sustained drop in income is highly correlated with having children and a high-earning husband.
via How Some Women Benefit From Marrying a Man Who Makes Less Money – The Atlantic.





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