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Methodological Considerations in Estimating the Gender Pay Gap for Employed Professionals

Author

Listed:
  • Laurie A. Morgan

    (University of Michigan)

  • Michelle M. Arthur

    (University of New Mexico)

Abstract

The authors address a methodological issue in estimating pay penalties to women professionals—whether the dependent variable in the pay equation should be hourly wage or earnings measured over some other period such as weeks, months, or a year. The authors analyze data on college graduates working in professional specialty occupations and on physicians, and they report two main conclusions. First, the appropriate specification of the pay equation for (employed) professionals is with ln(earnings) as the dependent variable with ln(hours) included as an independent variable. Second, the implications of using this specification for estimates of gender pay differentials are serious. In the data on professionals, respecification of the pay equation changes the estimate of the pay penalty to women from-4 6 to -7 6 percent. In the data on physicians, it changes the estimate from no penalty to a very large one, from -1 8 to -13 .0 percent .

Suggested Citation

  • Laurie A. Morgan & Michelle M. Arthur, 2005. "Methodological Considerations in Estimating the Gender Pay Gap for Employed Professionals," Sociological Methods & Research, , vol. 33(3), pages 383-403, February.
    • Handle: RePEc:sae:somere:v:33:y:2005:i:3:p:383-403
    DOI: 10.1177/0049124104269622
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    References listed on IDEAS

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    1. William T. Dickens & Lawrence F. Katz, 1987. "Inter-Industry Wage Differences and Theories of Wage Determination," NBER Working Papers 2271, National Bureau of Economic Research, Inc.
    2. F. L. Jones & Jonathan Kelley, 1984. "Decomposing Differences between Groups," Sociological Methods & Research, , vol. 12(3), pages 323-343, February.
    3. Wood, Robert G & Corcoran, Mary E & Courant, Paul N, 1993. "Pay Differences among the Highly Paid: The Male-Female Earnings Gap in Lawyers' Salaries," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 417-441, July.
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    Cited by:

    1. Fabian Ochsenfeld, 2017. "The gender income gap and the role of family formation revisited [Ein zweiter Blick auf die Bedeutung der Familiengründung für das Zustandekommen geschlechtsspezifischer Einkommensungleichheit]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 131-141, August.
    2. Ochsenfeld, Fabian, 2012. "The gender income gap and the influence of family formation reconsidered," MPRA Paper 43205, University Library of Munich, Germany.

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