Most or All of The Pay Gap Disappears After Controlling for Marriage and Having Children

The Department of Labor recently released its annual study Highlights of Women’s Earnings in 2008 (HT: Christina Sommers) and opens the report with the following statement:

In 2008, women who were full-time wage and salary workers had median weekly earnings of $638, or about 80% of the $798 median for their male counterparts. In 1979, the first year for which comparable earnings data are available, women earned about 62% as much as men. After a gradual rise in the 1980s and 1990s, the women’s-to-men’s earnings ratio peaked at 81% in 2005 and 2006.

MP: Doesn't the BLS' use of the term "male counterparts" (Webster definition: "one remarkably similar to another") imply an "apples to apples" comparison between male and females workers, as if all relevant explanatory factors have been controlled for, i.e. the ceteris paribus condition has been imposed?

For example, buried in the BLS report are these two interesting facts:

1. In Table 1, it is reported that for those workers who have never been married, women make 94.2% of their "male counterparts."

2. In Table 8, it is reported that for single workers with no children under 18 years old (marital status includes never married, divorced, separated and widowed), women make 95.6% of their "male counterparts."

In these two examples, I would argue that the term "male counterparts" is much more valid than the BLS' use of the term in the opening statement of its report when it is referring to all workers.

Since marriage and having children affect male and female earnings differently, men and women workers can't really be considered "counterparts" in a statistical sense, and any unadjusted comparisons would be comparing apples to oranges. In fact, some research has concluded that the factors of age, marriage and motherhood explain all of the male-female pay gap.

For example, in a 2005 NBER working paper "What Do Wage Differentials Tell Us about Labor Market Discrimination?" by June O'Neill (Professor of economics at Baruch College CUNY, and former Director of the Congressional Budget Office), she conducts an empirical investigation using Census data and concludes that:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics.

This observation is an important one because it suggests that the factors underlying the gender gap in pay primarily reflect choices made by men and women given their different societal roles, rather than labor market discrimination against women due to their sex."