Lakhasly

Even when researchers control for all observable characteristics, a portion of the gender wage gap is left unexplained. Economists often argue that this unexplained portion, while not synonymous with discrimination, may tell us how much gender discrimination could be affecting wages.

By this measure, discrimination is either stable or increasing. In a 2016 study, economists Francine Blau and Lawrence Kahn found that the unexplained portion of the gender wage gap narrowed dramatically in the 1980s, shrinking from between 21 and 29 percent of the gap in 1980 to between 8 and 18 percent of the gap in 1989. However, after 1989, the unexplained portion of the gap did not narrow any further, and it has remained stable ever since.

In a 2014 study, economist Claudia Goldin found that the unexplained, or “residual,” gap makes up more of the gap today than it did in the 1980s. Women today have more education and work experience, which has whittled away the influence of those factors on the gap. Human capital factors such as education and experience made up about 25 percent of the wage gap in 1979, but only 8 percent in 1998.

This residual gap is not uniform across occupations. Goldin argues that some professions disproportionately reward those who work very long hours, and this might explain why she finds a larger residual gap in business occupations than in science and technology fields. Also some high-wage firms have adopted pay-setting practices that disproportionately reward individuals who work very long and very particular hours, including weekends or late nights. This means that—even if men and women are equally productive per hour—individuals in these firms who are more likely to work a very high number of weekly hours and be available at particular off hours are paid more. This reward of long and nonstandard hours for highly credentialed employees works to men’s advantage (Hersch and Stratton 2002; Goldin 2014).

But expansion or contraction of the residual gap does not mean that discrimination is expanding or contracting to the same degree because the residual wage gap only captures discrimination in pay-setting between similar workers. It does not capture the range of factors that influence the different labor market experience of men and women before employers make hourly pay offers, and discrimination—in the form of society-wide constraints on choices—can certainly enter into these factors. For example, women’s choice of college major or occupation is conditioned on how well educated in science and math they were in college and even before. If gender differences in teachers’ attention or perception of academic excellence influence these choices about college major and occupation, then it will affect pay outcomes. Therefore, controlling for current occupation disguises how discrimination can filter men and women differently into high- or low-paying occupations.

While we can’t precisely measure how big the role of discrimination is, or set a ceiling on its impact, we do know that it exists. Empirical evidence of outright discrimination in hiring, promotions, and even wage-setting is strong and includes the following:

One famous study found that switching to blind auditions led to a significantly higher proportion of female musicians in orchestras (Goldin and Rouse 1997).
An experimental study of résumés submitted for job openings found bias against women and mothers and a preference for male applicants (Steinpreis, Anders, and Ritzke 1999). Another résumé study showed discrimination against women in the sciences (Moss-Racusin et al. 2012).
Researchers have also found that women are viewed as less competent than men, and that mothers are judged as even less competent than childless women (Ridgeway and Correll 2004).
In her book, Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart (2004), Liza Featherstone reported that “women make up 72 percent of Wal-Mart’s hourly workforce (nonsalaried workers), but only 34 percent of its managers are women. Women also earn less than their male counterparts in nearly every position at the company.”