KEVIN HALLOCK: My name is Kevin Hallock. I'm the dean of the ILR school. And it's my pleasure to introduce Professor Francine Blau. You're in for a treat this morning.
Professor Blau earned a bachelor's degree from ILR, from Cornell, in 1966 and then went on to Harvard University to earn a master's in 1969 and a PhD in economics in 1975. She spent the first half of her career at the University of Illinois at Urbana Champaign. And for the past 20 years has been the Frances Perkins professor in the ILR School. When Fran left the University of Illinois in 1994, after 20 years there, it opened a door for a space for a brand new PhD student-- a brand new, newly minted PhD to take his first job. That was me.
So Fran left the office, and then I took the office the next year, had the same office number, 207, the same phone number, and so on. And after 10 years there I followed her here. So I'm very glad I did that.
Although she's not particularly tall, Fran is really a giant in the economics profession. A real giant in the economics profession. She's bound editorial forces-- this is a little bit amazing for those of you who aren't academics, but she's been on the editorial board of 16 different journals. And some of you might imagine, why are the 16 journals [INAUDIBLE]? There are, of course, many more than that. But she's been on the editorial board of 16 journals.
She's currently the chair of the National Academy of Sciences panel on Immigration. So that's a subject that she's an international leader on as well. She's not going to be speaking about it today.
She's been the president of the Labor, Employment, and Relations Association, and the Society of Labor Economists. She won the very prestigious IZA award in Labor Economics and was a founding fellow of both the Labor and Employment Relations Association and the Society of Labor Economists. She even won the Daniel Alpern Award in 1966 for the best student in the ILR School.
Her research is remarkable, interesting, and path breaking. She's introduced entirely new fields of study to economics and social sciences. An early example of this is her 1977 book, Equal Pay in the Office, which is a subject she's still working on today.
She's also made remarkable contributions in other areas about pay, the gender pay gap, gender and family issues, female labor supply, occupational segregation, inequality in immigration. She's written or edited nine books and over 100 scientific papers. And one thing people might not know about her is that she's a kind and patient mentor. And I'm the dean of the school, and I feel very lucky to serve on the same faculty as Fran. Thanks.
FRANCINE BLAU: Thank you so much, Kevin. I mean, that was just such a lovely introduction. And it did-- you have to, of course, allow for certain hyperbole on the part of the dean, but I really appreciate it. And it did touch on one reason that I'm so proud to be giving this talk today, and that is as well as being a Cornell faculty member, I am a graduate of Cornell. And the institution is incredibly important to me.
So what we're talking about today is the gender pay gap. And I think the title actually says it all; going, going, but not gone. That's completely correct. So digging back there just a little more, after decades of constancy at about 60%-- and let me say that I was around for some of those decades, and if I gave a talk like this, I just didn't even have to look up what the latest figure was. I could just keep the 60%.
Some women's organizations made little buttons that said 59 cents that represented the $0.59 on the dollar that women were earning. So it was a time of const-- oh, I should mention one other interesting thing. One economist actually found a biblical reference, where females were supposed to get so and so many shekels and males so and so many shekels. And it worked out to 60%.
So he said, whoa. But nonetheless, this did start to change in 1980. There was a dramatic increase. And today, women earn around 80% of men, on average. And so you are all noting that 80% is less than 100%. So there's still a pay gap, but there has been a lot of progress.
So the questions that I'm addressing in this talk is first what factors help to explain this increase in the gender pay ratio. But why does a considerable gap remain? And what might we do about it? What policies might help us in further reducing the gender pay gap?
Now let me start with a little background. Since World War II, there has been what an illustrious economist, Claudia Goldin, who is a Harvard professor and a Cornell graduate, has called a quiet revolution in gender roles. Gender roles between men and women have shifted markedly. Not so much because people were out at the barricades, although there was a little of that. But because year upon year, there were changes, particularly in female labor force participation rates, that cumulatively added up to what she has called, I think rightly, a quiet revolution in gender roles.
So let me show you briefly what those changes have been, or give you an overview. Back in 1940, the first set of bars, where we have-- oh, interestingly, because I think PowerPoint chose the colors. But we have blue for women and green for men. It would have been interesting, I guess, if it was pink for men, but it's not.
So look at the massive difference in labor force participation rates. So what are labor force participation rates? They are the share of the population who works outside the home for pay, participates in the labor force. And in 1940, that was true of the overwhelming share of men, 83%, but just 28% of women.
And as you can see, those blue female bars were rising. And today, about 60%-- I'll come back to some of the differences there in a second-- but about 60% of women, adults, work outside the home. Interestingly, at the same time, participation rates were falling for men, as more men were able to retire with the advent of Social Security, and also as we see here, as people were saying in school longer. So by 2013, the distinction between men and women in participation rates, it still existed, but it was much smaller. 57% of women, compared to 70% of men.
Now, if you look at those bars a little more closely, and I'll be coming back to this at the end, there was a sharp steady increase in female labor force participation rates until the 1990s. And the female rate has plateaued since then, and even declined a bit in the wake of the great recession, as the male rates have.
So we are looking at 1940 here, comparing it to 2013. The distinction between men and women has greatly diminished. But one interesting trend is this flattening or plateauing of the increase in female labor force participation rates.
Now, in terms of the gender pay gap and what Claudia called the revolution in gender roles, a crucial part of the story is not simply that participation rates have been increasing, but crucially, women began to work more continuously over the life cycle. And one dimension of this was the growth in participation rates of married women.
So for example, prior to 1940, the typical married woman left the labor force permanently after she had children-- excuse me-- after she married, and particularly after she had children. Post World War II, married women begin to enter the labor force. And critically, moms began to put to work outside the home. Not just mothers of school age children or older children, which is what happened first, but also mothers of preschool children.
And that added up to more and more women, not all of them, being in the labor force rather continuously over the life cycle. The other shift is that women moved from taking jobs, that is looking for work if the family needed extra money or something of that sort, and more systematically thinking in terms of careers, as their male counterparts did.
And so this brings us to the gender pay gap, which is our focus today. And I think it's an important focus, and I guess you're being here indicates the same. Of course, how much people earn is critical to their well being.
So that's one reason we're interested in it. But also, I think it's a great summary measure of a myriad of changes of women's greater attachment to the labor force, of shifting roles within the family, of occupational upgrading. It's all indicated to some extent in what women earn relative to men. And we are seeing an increased interest in that topic.
So this is-- how many of you saw Patricia Arquette's Oscar acceptance speech, where she called for pay equality between men and women, and women's rights. This is her making that statement. And this is Meryl Streep and J Lo responding to her making that statement. So it was a very popular-- the room erupted in cheers.
So more and more people think this is important. By the way, this is in the wake of the Sony hacking scandal. And I don't know how much of you saw that coverage. But it was actually hacking on the part of the North Korean government, for various reasons. But they released a ton of confidential information that revealed a very large pay gap, even within the administration of major studios, and in terms of how stars were treated. So anyway, that's a footnote.
So what about the gap overall, for mere mortals who are not movie stars? This is what the trends look like. So we start-- this is, by the way, government data. And it's for full-time workers to adjust for any differences in hours between men and women, since women are more likely than men to work part-time.
There are two measures. One that you've probably seen more in the press is the annual earnings of year round full-time workers. So that's annual earnings, the blue bar. And the red bar is the weekly earnings. It's based on the weekly earnings of full-time workers. These, again, are ratios.
And they show the same trend. This, again, indicates the stickiness around 60%, till we get to 1980. Then we have a decade of very substantial consistent change. Year after year, the ratio increased. Post 1990, continued increases in the ratio, but the less consistent and less strong. But nonetheless, continued progress.
Overall, women went-- by the year round full-time measure, the blue bar, they went from 60% percent in 1980 to 78% in the latest figures. So explaining the gender gap. What I'm going to do is begin by considering fundamental explanations for the gender pay gap that have been developed in the economics literature. And then I'm going to apply these explanations to understand why there is a gap and why it has declined. And also, again, noting that the gender pay gap, though it's declined, has not been eliminated, and think a bit, as I said before, about what we might do to nudge it further along.
Now I do want to make a point about how economists look at the determination of wages. And we generally divide things into the supply side and the demand side. And that's how I'm going to divide the explanations. The supply side relates to decisions men and women themselves make that could result in women earning less than men. So it's locating the source as a big gap, in terms of individual's own behavior.
However, even, as I'll show you, when we look at equally qualified men and women, or we use statistical techniques that would help us to focus on equally qualified women, there could still be a pay difference. And that's located on the demand side. Different treatment by employers of equally qualified individuals, and that is an indicator of discrimination. So we're going to look at both sides, starting with qualifications, or the supply side.
Now, the first set of qualifications I want to consider falls under the category that economists call human capital. And the idea of human capital is that individuals make investments in themselves today that increase their productivity and their earnings in the future. And two major sources of human capital that have been extensively looked at in terms of the gender gap are education, which some of the audience, I know, is investing in right now, and work experience. Because you do learn important skills and abilities through experience in the labor force.
Now, how do these two relate to the gender pay gap? Education is actually kind of interesting. When I was in school, and it used to be the case, actually, males were more likely to go on to college and beyond. So they, on average, were more highly educated than females. That has actually reversed.
Today, women are more likely to graduate college than men. So actually, today, educational differences between men and women do not help to explain the gender pay gap. In fact, they make it a bit more difficult to explain, and I'll come back to that later.
Work experience is something that has been greatly emphasized in the literature on gender. And that is the idea that even though more and more women are working outside the home, they tend-- they're more likely to move in and out of the labor force than men are to attend to family responsibilities. And that traditionally, and even to some extent today, contributes to a gender pay gap.
Next I want to mention sector. When I first started studying this area, one of the overwhelming differences between men and women then, and still the case today, even though it's decreased, is that men and women tend to be in different occupations, and they tend to be in different industries. And it turns out that the predominantly female occupations and the sectors, the industries women are in, tend to pay less than the predominantly male sectors.
Now, this undoubtedly helps to account for the gender pay gap. One concern or issue is whether this is a supply side or a demand side factor. Because individuals decide what occupation or industry to go into, but also employers make decisions as to who to hire. So I'm putting this, for now, under the supply side. But I want you to be aware of that qualification.
Now, Claudia Goldin has come up recently with another very interesting idea of a factor that contributes to the gender pay gap, and that is that women, compared to men, are often seeking temporal flexibility. Given family responsibilities, they may want to work fewer hours. They may want to work part-time.
They may be leaving the labor force for periods of time. And that contributes to a pay gap, particularly in very high end occupations, where more and more, the full-time worker is working 50 or 60 hours a week. 40 hours a week is actually considered part-time work. So these are some hedge fund managers, high powered lawyers, et cetera.
And so as Goldin points out, again, the inability of women or lack of interest of women in doing this contributes to the gender pay gap. Now, I also want to briefly mention an area that's gotten a lot of attention among economists in recent years. And that is there are average differences and psychological attributes between men and women, what some have called soft skills, that maybe correlated with how much people earn.
So some very interesting relatively recent work documents-- and I know this has gotten into the press, so this may be familiar to you-- that women have a lower propensity to negotiate than men. And you can see how this gender difference in willingness to negotiate could lower their salary, relative to men.
It's also been established in laboratory experiments that women tend to shy away from competition, compared to men. Men sometimes even seem to seek out competitive environments, and women are less interested in them. And this could adversely affect their pay by influencing what kind of occupations they go into and what kind of compensation arrangements they're interested in. Because some compensation arrangements that are heavily dependent on your performance relative to others pay more on average. It's also been shown that risk aversion, in terms of risk aversion, women are, on average, more risk averse than men. And that too could channel them into lower paying occupations, because it's been shown that occupations with greater variability in rewards actually, on average, pay more. I can't let this completely slip by, saying that these traits are not always advantages. We might have preferred that those in the financial sector were a bit more risk averse prior to 2008.
It has actually been found in these lab experiments that men enjoy competition so much that they actually will choose to compete, even when that will lower their return. Whereas even very high-powered women might shy away bit. So those are qualifications.
I have a couple more. Not all psychological attributes that have been identified as important favor man. Oops, sorry. That's the second one. Some attributes, for example, interpersonal skills, on average, women seem to be better endowed with interpersonal skills.
That may not come as a great surprise to you, but I just want to say that's not my own personal perception. It's the authors of the paper that I've cited that say that, and they're all males. And apparently, on average, interpersonal skills do favor women. And there's a pretty high, and it looks like a growing reward to such skills.
The other thing, which is the first bullet point there, women sometimes encounter negative reactions when they act in what are perceived to be unfeminine ways. So actually, in experiments, they found that when women negotiate, sometimes it elicits a negative response on people. People don't like them. They don't want to work with them. They're not happy that they're doing it. Because it's considered outside the traditional gender role to push yourself forward in that way.
So women in the workplace are kind of walking a line. You know, darned if they do, darned if they don't. If you don't negotiate, you can't boost your pay. And if you do, you might get a negative reaction. In any case, that's what I wanted to say about the supply side qualifications.
What about the demand side? Economists have developed a variety of models that seek to explain the motivation for discrimination. The first or the various motivations for it. The first I would mention is that developed by Nobel Prize winner Gary Becker, who essentially looked at discrimination as a personal prejudice.
So I don't necessarily think that the woman who's interviewed for the hedge fund manager job would do a bad job, but I'd just rather not. I'd rather not work with her in that capacity. I'd rather not have a female plumber. I'd rather not hire a female electrician, whatever.
Another view of discrimination, which I think accords a little more with what we might think motivates employers is that in the real world, there's a lot of uncertainty about how good a job somebody would do. And so if you have views that say to you, on average, males would do a better job at it than females, or on average, women are more likely to quit their jobs than men, you may treat the class of women and the individual women as they fit those averages.
Well, those averages could also be called stereotypes, right? So statistical discrimination involves paying women less, or not hiring them for particular occupations or job openings because of your view about the average abilities of the group. And then briefly, I want to mention one more idea that's very recent, and that's called implicit discrimination.
And it's really economists borrowing from social psychologists. And that is that discrimination is not always conscious. We, all of us, may have subconscious views in which we've incorporated stereotypes about women compared to men or various prejudices about women, and that may influence our behavior, even if we're not aware of it consciously.
OK. Let me get-- move onto the evidence about discrimination, where more of my personal work lies. And there are two approaches for seeking the role of discrimination in other sources of the gender pay gap. And one is a statistical approach, which is the area I worked on. And then there's some interesting experimental evidence I also want to call to your attention.
So this is work with my Cornell colleague, Larry Kahn, who's also my husband. And we have analyzed a large data set, using statistical techniques to pinpoint the role of various measured factors, factors that we can measure, and explaining or accounting for the gender wage gap. This data relates to full-time workers in 2010.
The wage differential between men and women in this data set is about 21%. Percent And then we can look at the percent explained by various factors that relate to factors I've already mentioned. Now, let's skip the first one and look at labor force experience.
OK. So to the extent that women have less experience than men, to the extent that they've moved in and out of the labor force, we find that can explain 14% of the gender wage gap. So it does explain a portion of the gender wage gap. Gender differences in occupation explain nearly a third. Gender differences in industry explain about 18%.
What about educational attainment? What does this minus sign mean? Well, it means, actually, now, on average, women are more highly educated than men. So that actually doesn't help us explain the gender pay gap. It increases the amount that we would need to explain.
Then we have a few other minor controls. Union status would have been very important 20 or 30 years ago, but there's been an enormous decrease in unionization in the US, and men have disproportionately-- their unionization rates have disproportionately decreased. And so what was a gender gap in unionization has been virtually eliminated.
OK. So this is a very detailed study. And we get that 38% of the gender pay gap cannot be explained and I would say is potentially due to discrimination. I'll return to that point in a little bit.
Another way to look at this is in terms of the ratio. And the first bar here gives what we call the unadjusted ratio. This is just the ratio when we just analyze the data. We find that women, on average, earn 79% in our data set, which accords very closely to the government data that I summarized to you before.
What if women had exactly-- men and women had exactly the same education and experience? Our statistical analysis says that women would earn 82% of what men earn. So an interesting thing here is 82% is not very much higher than 79%. What that means is, taken together, education and experience don't explain much of the gender pay gap.
That's because on the one hand, actually, women have more education than men. On the other hand, they do have a bit less experience than men. So that's kind of a wash. What is important is when we go here and adjust for all, and that includes industry and occupation, women would earn about 92% of what men earned if they had the same personal qualifications, like education and experience, and also worked in the same occupations and industries.
I'd like to point out that is much higher, because occupation and industry are important determinants of the gap. But it still leaves over 8% unaccounted for, unexplained, and potentially due to discrimination.
So what about the glass ceiling? Is there a glass ceiling? So she-- this little girl is saying, as her father reads her a story, stop-- skip to the part where the princess climbs to the top of the corporate ladder.
I think the cartoonist is trying to say that's a bit of a fairy tale today to think that this little girl might do that. In fact, women are just a handful of CEOs of major corporations. Though I have to say it's a bigger handful than they were in the past.
The further you go in management, in academia, in government, the scarcer that women are. We found a way to quantify that. And in Larry Kahn and my research, we looked at the gender pay ratio at different percentiles of the wage distribution.
So what this is saying is that towards the bottom of the distribution, at the 10th percentile of the male wage distribution, women at the 10th percentile of the female wage distribution, women earn about 82% of what men earn. But if we go to the 90th percentile, to the top of both distributions, the gap is larger. Women earned 74%.
And this is the same pattern if we control for measured characteristics, and it's consistent with the idea of a glass ceiling keeping women from the very highest reaches. So our evidence indicates supply side factors are indeed important. Experience, occupation, industry, they do play a role, but there is also a substantial unexplained gap that is consistent with discrimination.
But there are problems with using the unexplained gap as a measure of discrimination. On the one hand, if actually, I'm talking about our study in part, because it's our study. But it is one of the most thorough. It includes measures of the major factors that are believed to influence wages. But it doesn't include all of them.
There's nothing here about negotiation propensity. There's nothing here about motivation and commitment. Some things might be possible to measure, but are not in our data set. Some things are intrinsically not measurable.
Now, if there are important omitted variables that favor males relative to females, the estimates of the unexplained gap I've given you here could overestimate discrimination. On the other hand, if we include factors that could be themselves influenced by discrimination, and we control for those, we could underestimate discrimination. And what I have in mind here, for example, is occupation and industry, which we did adjust for. And it made a very big difference.
So the unexplained gap is much larger when we simply adjust for experience in education than when we add these controls for occupation and industry that could potentially be impacted by employer's hiring decisions. So as a consequence, we look for confirmation of statistical results like this with experimental evidence. And we do indeed find such confirmation.
These are very interesting studies. They don't tell us about the labor force as a whole, but they do give added credence to the idea that discrimination exists. The first one I'd want to talk about is what I'm calling a natural experiment. This experiment was not run by social scientists, but the world acted as if an experiment was occurring, and that they could analyze that data.
And what happened is in the 1970s, they noticed women were enormously underrepresented among musicians in concert orchestras. So they instituted a policy of having the women audition, or having everybody audition behind a screen, so those judging them could not tell what their sex was. And it turned out it greatly increased the probability that women would advance to later rounds of auditions and be hired for the orchestra. So that suggests that there was discrimination against women in the absence of the screen.
There have also been audit studies where what you do is send out pseudo job seekers, either in person to apply for the job, or mail resumes. And you equalize the qualifications of the males and the females and see how the applicants fare. And they have found discrimination in a number of interesting cases. This is just a few examples.
Wait staff in Philadelphia restaurants, where they found that there was enormous lesser propensity to interview or hire females for wait staff jobs at high end restaurants. And think for a minute. When you go to a high end restaurant, isn't the wait staff overwhelmingly waiters rather than waitresses, or males.
Another one that was disconcerting was they sent resumes of seniors, college seniors, to apply for the jobs as science lab managers in a number research universities. And they asked faculty to review the qualifications of the applicants. They arranged it so the applicants had similar qualifications.
And moreover, the faculty reviewing the application files were told that these seniors planned to eventually pursue their studies at the PhD graduate level. And I have to say, both male and female faculty rated the resume as higher if they thought it was a male who was applying, in terms of competence, commitment, ability. And they actually gave suggested starting salaries for males that were higher than for females.
And the last one I want to mention highlights another issue and concern, and that is how mothers are treated, versus non-mothers. And they found, both in laboratory experiments and in the field, that similar qualified resumes, but if the person making the judgment thought the individual was a mother, they rated the resume less favorably and were less likely to hire the person. And there was no difference for fathers versus non-fathers. So obviously, that also contributes to a pay gap. So the experimental evidence suggests discrimination is indeed a factor.
The bottom line, supply side factors do help explain the gender gap, but discrimination also plays a role. Does this help us explain the decrease in the gender pay gap over time, or the rising ratio? Have women increased their qualifications? Has discrimination declined?
This is interesting, because the overall context has been one of rising wage inequality. So you've all read about the top 1% growing inequality. But really, the wage distribution is spreading out considerably beyond that. Now, how does that relate to the gender pay gap?
Well, one reason that wage inequality has been rising is that there's been an increase in the demand for skill, and that has boosted the returns to skills like experience in education. And there's also been-- Larry Kahn and I found in our work-- a growing gap between the pay and high paying, predominantly male occupations and industries and lower paying predominately female occupations and industries.
So these trends should have worked against women. Women on average are less skilled, at least in terms of experience, although they do have more education. They are concentrated in lower paying female occupations and industries. So they should have essentially been swimming against the tide of rising wage inequality. But they have been able to do so successfully. So an issue is how were they able to do so.
And what we've found is they increased their qualifications, elaborate more, relative-- absolutely, as a matter of fact, but also relative to men. And I'll elaborate more on that in a second. They reduced the unexplained gap, suggesting perhaps discrimination against women declined, although there are some other factors. And they benefited from shifts in demand for labor in general that favored women as a group, relative to men. And I'm going to elaborate on each of those points.
In terms of labor force attachment and experience, with growing female labor force participation rates, the gender experience gap has fallen from nearly seven years-- that is the difference in average experience between men and women-- nearly seven years in 1981, to just 1.4 years in 2011. So it's really shrunk greatly.
In education, the gender difference has actually been reversed. So in 1970, women received 43% of bachelor's degrees. Today, they receive 57%. Now, it takes a while for that to show up in the labor force.
So in older cohorts, men tend to be better educated than women. In younger cohorts, women are better educated than men. But more and more, the labor force as a whole, women are the more educated group. And that's what we're finding.
In terms of occupations, women moved out of relatively low paying female-- quote "female" means predominantly female-- clerical jobs, and into what used to be predominantly male managerial and professional occupations in the professions including law, medicine, veterinary science, et cetera. It wasn't all just games for women. Men actually have lost high paying, blue collar, and union jobs, and that has boosted the pay of women relative to men.
Well, it's also true that the unexplained gap fell. And I ask, how do we interpret the decline? It's interesting when something unexplained declines, but what does that mean. Well, I would say it reflects, and our research says that it reflects three general changes.
First of all, I really do believe there was a decline in discrimination since around 1980. Second-- oh, and by the way, I think there's an obvious motive for that decrease in discrimination. As women have increased their qualifications and become more attached to the labor force, employers' rationale for statistical discrimination against women decreased. So as women were looking more-- as a word-- women were looking more like men. So I think that's a factor in the decline of discrimination.
I think also social attitudes have changed, and it's much less acceptable today to discriminate against women. Though, unfortunately, such discrimination has not disappeared. I think it's also reasonable to think that women improved their unmeasured skills. Because we know their measured skills, the things we could measure, have increased greatly. It's likely the things we can't measure; motivation, commitment, propensity to compete, have also risen, relative to men.
And then there have been economy-wide trends favoring women workers relative to men. That means increasing the demand for women, and thus increasing their pay. And we can see this in the decline of the manufacturing sector and blue collar jobs that were the bastion, traditionally, of men, and the growth in white collar and service jobs and in the health and education sectors that have been much more dominated by women.
And also it has been found that there's a growing importance of interpersonal skills, where-- is another area where women have an edge. So looking towards the future, what policies might be useful in further closing the gender pay gap? Obviously, I think the government's anti-discrimination laws continue to have a strong role to play. So I did want to emphasize that, because I said that I thought discrimination decreased, but I think I've been pretty clear that it has not been eliminated entirely.
I think we have a good set of anti-discrimination laws on the books. And indeed, the US was a pioneer, one of the first countries to institute such laws in the 1960s. And we can't get complacent. We have to continue to enforce that.
But if we want to fully close the gap, I think we have to also address work family issues. And this is another cartoon. So here's a woman doing what many women do. She's juggling. She's got the two kids and the briefcase.
And this is a cute take on it, where he's saying, OK. Now, on three, I'm going to toss a second job in there. [CHUCKLES] So she's got her hands full, and a lot of women have their hands full. What can we do to make things better?
Some other research that Larry and I have done suggests that it could be important to address work family issues if we want to further lower the gender pay gap. Because on the one hand, as I mentioned before, participation rates of women have plateaued since the 1990s. And our work suggests that problems of work family issues could play a role in this stagnation.
And specifically, we found that female labor force participation rates in the US have been falling behind other developed countries. And let me give you some specifics there. In 1990, the US labor force participation rate was at the top end of 22 developed countries, OECD countries. It was sixth out of 22. By 2010, the US ranked 17th, towards the bottom.
So we were a leader in female participation, and we've gone to being at the bottom end. It's not surprising to me that we were first, and some other countries have caught up to us. But they haven't just caught up to us, they've surpassed us. And at the very same time they surpassed us, they were instituting and expand-- they were expanding really-- female-friendly policies. They were always actually kind of ahead of us in those policies. But they were expanding the amount of parental leave that they offered.
In the US, the government mandates 12 weeks of unpaid leave for the birth or adoption of a child. On average, across these countries, it was a year, and generally paid at some rate or other. So it's a big difference. They also have rights to part-time employment in some of these countries. Not all of them.
In some of these other countries, you can walk into your employer and say, I would like henceforth to work part-time, and the employer has to do that. In some of the other countries, you can ask. The employer can say no, but the employer has to give a reason.
We found the US participation rate would have been nearly seven percentage points higher in 2010 if we had these non-US policies. So this strongly suggests that better work family policies could help to increase the female participation rate. And we would assume in general that that would have favorable effects on women's labor market outcomes.
However, our research also identified an important qualification. And that is although participation rates are lagging in the US, US women actually did much better, noticeably better, than the other countries in the female share of managerial and traditionally male professional jobs. So women in the US are better represented in these higher level positions.
So what our work suggests is there may be a trade off between some work family policies and labor market equality for women. Now, why might this be? Well, first of all, if you have the possibility of a year's parental leave, some paid at various levels, you may end up taking more time out than you otherwise would have. And that's going to widen the experience gap between men and women.
Now, that's an individual choice. But what concerns me is that women may feel kind of channeled. Oh, you're a woman. You want to take more time out. That's what you should be doing. Establishing norms of a longer absence. Or mommy tracking women, as I put it here.
The other thing that also concerns me is it could actually increase discrimination against women. Employers might say, well, if I hire a young woman, maybe she'll have a child, and she'll be out for a year. OK. Maybe I'll hire her for this lower level job, but I don't want to put her in an important responsible position. So it could actually increase discrimination.
So what are some options that would make women better off but not have these problems? Well, I think one is that we could have leaves that are more generous than we have in the US. I mean, 12 weeks is awfully short. But shorter than these other countries. We don't have to go quite as far as they have.
And I was very interested, when Larry and I were visiting Norway, right after they extended the duration of the parental leave there, it was under a conservative government that they extended the duration. So it was, I think, with a conscious desire to almost encourage women to take more traditional gender roles. So I think the very long leaves may be something that we'd want to question.
We also have to encourage dads to take leaves. That's very, very, very important. Because then the employer does not say, if I hire this woman, she may be out. No. I mean, if I hire a guy, he may be out as well. It's very hard to do this.
In the United States and other countries, leaves are available to both moms and dads. They are disproportionately taken by moms. But one interesting idea that has been developed in Scandinavian countries, and actually in Quebec, is what are called daddy only leaves, where the family receives some additional leave conditional on it being the dad that takes it.
So it's additional leave available to the family on a use it or lose it basis. But the dad has to take it. And that's been shown to greatly increase dads' participation, though even in these settings, women take the bulk of the leave.
The other thing is a lot of attention focuses on parental leave, and it's very important. But let's not forget childcare. Because childcare really facilitates continuous attachment to the labor force of women. And so expanding the availability of high quality child care and preschool programs, as President Obama suggested for preschool programs, I think is very important. And I would add to this after school programs as well.
And policies that allow for temporal flexibility but are not targeted on women. And I would say these are not government policy-- and I say not targeted on women because that could mommy track the women. But Goldin and Katz, two Harvard professors, have pointed to a very interesting case on pharmacy.
In the case of pharmacy, this used to be a predominantly male job. A lot of pharmacists were self-employed. There's been a revolution in pharmacy, due to, actually, information technology and computers. Pharmacies are now big chains. The important information about you and your prescription and your other prescriptions is on the computer.
Pharmacists are still highly skilled, but they don't-- but they're also relatively substitutable for each other. They don't have-- one pharmacist does not have knowledge that another pharmacist doesn't have. And so actually, pharmacy has become to represent a lot more women in the past, but also it doesn't give big penalties for working shorter hours. It doesn't give big penalties for part-time work or work interruptions, because of these changes in how work is done.
So it's something to think about. I don't think, given the importance of clients in many business settings, given the importance of client relationships in law, I'm not sure we're going to be seeing this right away in those areas. But the way medicine, doctors are moving now, we might see more of that kind of substitution.
So my conclusions. Women have made significant and dramatic progress in the labor market. But very importantly, inequalities remain. I hope it's not disappointing to you that I'd have to say there's no one silver bullet to address this problem. But I do feel that the pursuit of a number of policies that target both discrimination and work family issues could be helpful in reducing the gap still further. Thank you. Thank you.
KEVIN HALLOCK: Anyone like to ask a-- go ahead.
SPEAKER 1: I'm just wondering what your numbers, in terms of the gender gap looks like when you begin to control for race, if you've done so. And so what would be the changes in the numbers when you're looking at white women versus white men, men of color versus women of color, and women of color versus white men.
FRANCINE BLAU: So we haven't performed all those in separate analyses. Our overall work controls for differences in the race composition of the male and female workforces, because unfortunately, minorities work-- excuse me. Minorities earn less than whites in both groups. And it turns out, minorities are a bit more heavily represented among women. So we've adjusted for that factor.
But in general, without the adjustment, it's very interesting. The pay gap is largest for whites. It's pretty similar for Asians. This is the gender pay gap. And it's a smaller among what I would call disadvantaged minorities, like blacks and Hispanics. And that partly, I think, reflects the problems of the males in that group of reaching the top. Yes.
SPEAKER 2: First of all, thank you so much for doing this presentation. It was amazing. My question is that so we talked about how discrimination in the workplace is like a completely common entity. Do you feel there's more discrimination posed by male managers as opposed to female managers, or vice versa? I just want to experience-- or like, meeting [INAUDIBLE] upon the queen bee mentality. Did you see anything like that in your research?
FRANCINE BLAU: Our research-- our own research did not look at that issue. I am familiar with research that has. And I did mention that one particular study that was disappointing, where both males and the females in the laboratory manager position disadvantaged the female applicants. So there are results like that.
And let's face it, we are all products of our society, and some discrimination is unconscious. And I think females could have those discriminatory tendencies too. I mean, that's why when someone says to me, maybe a male, I would never discriminate against a woman, I think they're not understanding the way it works.
However, there is some research that suggests the more women at the top, the better the women fare lower down. So while I think women are not free of this problem, I do think that women have it to a lesser extent. And that's also important from a policy perspective in advancing women up the ranks and combating the glass ceiling. We're not just helping those individual women, we're helping women lower down advance as well.
KEVIN HALLOCK: Last question. Nick.
NICK: Thanks. I wanted to ask about the European countries and cultural issues. It seems to me that in Austria and Germany and France, I'm just not clear about what the mommy track really means in those countries, because-- and I only have episodic evidence-- but France and two of those countries who took up to two and a half, three years off, most of it at full pay, and went back to the jobs that they were in.
And they seemed not to-- the women, now-- seemed to have any complications with it individually, but also socially. And in terms of their job and their occupation, it's not evidence of [INAUDIBLE], but just a question about that's impossible in our political climate in the United States. Not just today, but for the last 250 years [INAUDIBLE]. So some of the--
FRANCINE BLAU: OK. So there's a few things in there. So let me just say about your own personal experience, that I think that the mandates do protect people well. So if you are already in a particular job and you take a leave, you do have job protected leave. You do go back to your former position. But what our statistical evidence is saying is that globally, it seems to work against women getting into those jobs in the first place.
So again, I don't know what jobs your friends-- your colleagues were in. And maybe they did individually have good jobs. But if I'm going out to hire a manager, a lawyer, whatever, it could work against them. I do think the culture in the US is quite different, and I would not expect the adoption of a radically changed policy in the US. I don't think it's very practical.
But I think that there is a movement afoot, and I was very pleased in President Obama's State of the Union message to more seriously consider paid parental leave. I didn't have a chance to get into this, but unpaid parental leave favors more educated, high skilled women, relative to less educated, less skilled women. Because at the lower ends, they can't afford to take even the full 12 weeks, because they can't afford to give up their income.
So having paid leave would help. And I think it's maybe possible. And I'd say longer leaves within bounds. But I'd say expansion of leave duration would be very helpful.
KEVIN HALLOCK: Thank you, Fran.
FRANCINE BLAU: Oh, thank you. Thank you again. I really enjoyed it. Thank you.
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Francine Blau, the Frances Perkins Professor of Industrial and Labor Relations and professor of economics, charts the dramatic decrease in the gender pay gap since 1980. She examines the reasons for its decline but also for its continued existence; policies that might reduce the pay gap further are also considered. Part of Cornell's sesquicentennial celebration, April 24-27, 2015.