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Discrimination and salary negotiation play roles in pay gap

Monday, November 5, 2012  
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Factors beyond college major and occupation -- including discrimination and salary negotiating skills -- are responsible for the country’s gender pay gap, according to "Graduating to a Pay Gap,” a study by the American Association of University Women (AAUW), which looked at the earnings of women and men one year after college graduation.

In 2009 -- the recent year for which data are available -- women one year out of college who were working full time earned, on average, 82 percent of what their male peers earned. After controlling for hours, occupation, college major, employment sector and other factors associated with pay, the pay gap shrinks but does not disappear, AAUW reported.

About one-third of the gap cannot be explained by any of the factors commonly understood to affect earnings, indicating that other factors that are more difficult to identify -- and likely more difficult to measure -- contribute to the pay gap. 

Cultural gender norms can play a role in the "explained” portion of the pay gap. Men are more likely than women to major in fields like engineering and computer science, which typically lead to higher-paying jobs. Women are more likely than men to major in fields like education and the social sciences, which typically lead to lower-paying jobs.

But college major is not the full story. One year after graduation, a pay gap exists between women and men who majored in the same field. Among business majors, for example, women earned just over $38,000, while men earned just over $45,000.

Differences in the number of hours worked also affect earnings and contribute to the pay gap. One year out of college, women in full-time jobs reported working 43 hours per week on average, and men in full-time jobs reported working an average of 45 hours per week.  

Economic sector is another part of the equation. Men were more likely than women to work in higher-paying sectors of the economy.

Yet, when AAUW controlled for each of these factors, women still tended to earn less than their male peers did. Among business and management occupations, for example, women earned 86 percent of what men earned; similarly, in sales occupations, women earned just 77 percent of what their male peers earned.

Gender discrimination is one potential contributor to the unexplained pay gap, according to the report, which cited the increasing numbers of claims filed with the Equal Employment Opportunity Commission and the millions of dollars employers pay annually in awards, settlements and other legal fees. What’s more, experimental evidence confirms that many people continue to hold biases against women in the workplace, especially those who work in traditionally male fields, AAUW reported.

Another possible explanation for the unexplained portion of the pay gap is a gender difference in willingness and ability to negotiate salary, as men are more likely than women to negotiate their salaries, AAUW concluded. In part, this difference may reflect women’s awareness that employers are likely to view negotiations by men more favorably than negotiations by women.

Complete study

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