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Women around the world aren’t paid nearly enough

Tyler Cowen points me to some truly remarkable research today. The topic is the pay and productivity of women in a large multinational corporation with offices and factories around the world.

The central insight of the study is that if women face high barriers to entry into the labor market, then only the best, most productive women are likely to work. As barriers go down, the performance of women will become more average.

But not entirely average. Check this out:

On the left side of the chart, where female labor participation is low, women's productivity is astronomically higher than men's. But even on the right, where participation is high, women's productivity is still about 50% higher than men's.

Unsurprisingly, this affects pay too:

The authors conclude across the board that optimal pay for women should be higher (and optimal pay for men should be lower). And the difference isn't small:

Given the productivity differences between men and women, the firm could increase productivity for the same wage bill if they were to change the terms of the wage contract to attract more women....However, we note that such a contract would significantly increase inequality within and between genders; most notably, the difference in pay between women and men would go up by 78%.

And this:

We show that equalizing barriers between genders would bring the pay gap to zero and would increase productivity by 32%, while keeping the wage bill and employment constant.

Among other things, the authors conclude that women perform so well that hiring managers should practically hire them sight unseen if their visible qualifications are even in the same ballpark as a similar man.

I'm unable to judge the methodology of this paper, but I'll offer one caveat: the effects are just too big. I'm always a bit skeptical of gigantic effects since the real world doesn't often produce them.

Also, keep in mind that this is not purely US research. One reason for the big effects is likely that many of the countries under study are poor and have exceptionally high barriers to female work. Under such circumstances it might not be surprising that women are enormously underhired and underpaid. The same wouldn't be true in an advanced economy like the US.

18 thoughts on “Women around the world aren’t paid nearly enough

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  1. tango

    When you get something so counterintuitive, you really, really, really need to look at the methodology to see exactly what was compared, like, for instance, do women in the surveyed places work in fields where there is higher productivity than men do and is THAT responsible for the difference (not saying this is or is not the case, just a sample kind of question)

  2. Joseph Harbin

    I'm not surprised. In fact, this supports my experience in the work world, for some of which I was a hiring manager. Women on average were far better job applicants and far more capable employees. I hired more women not because they were women but because they were better qualified.

    Maybe that's in part because "women in the workplace" were a select subset of "all women." Men on average have fewer non-career options, so male workers are more likely to be average.

    I worked in business management with a workforce that was college-educated and diverse. When you work with women (and minorities) who are highly competent, it becomes hard if not impossible to understand why so many people hold sexist (or bigoted) attitudes. One reason is that they haven't had that experience of working with a diverse group of colleagues, which happens more often (though not only) in work that doesn't require a college education. That's one of the key divisions in society and in our politics.

    More women in the workforce really does make for a better world.

    1. Chondrite23

      Rough idea how many people did you hire? Dozens? Hundreds?

      I was involved in a small number of hires. We had several good experiences hiring female engineers and one bad one. Very small sample size.

  3. Salamander

    This has been apparent for many decades: that women are not only better workers and more qualified; you can also get away with paying them significantly less than your drone male force. If not for societal misogyny and patriarchism, everybody would preferentially hire women. Better ROI.

  4. SnowballsChanceinHell

    Remember folks! It's perfectly safe to publish on sex differences, so long as those differences always favor women.

  5. MattBallAZ

    But Bryan Caplan has built a white male victimhood complex on his "woman have it so much better" contention!

  6. ScentOfViolets

    It's Tyler Cowan. That right there is enough to disregard any so-called 'findings'. Please, in the bowels of Christ I beseech you, no more musings of the morally challenged third-rater.

  7. D_Ohrk_E1

    As barriers go down, the performance of women will become more average.

    This phrasing feels weird. How about this: As the barriers go down, the aggregate performance gap with men will even out.

  8. Perry

    It strikes me that when someone works to hard, as Drum does today, to discredit a finding he doesn't like and personally doesn't want to accept, that is a form of bias itself. These findings are consistent with many other studies of women's employment.

    And the idea that a large effect size must inevitably be wrong, is itself another form of bias. Scientists pledge to follow the data, not their own preferences.

  9. name99

    As always, be careful what you wish for...

    Let's assume the research IS accurate. Note that it was performed outside the US.
    What's the situation in the US?

    https://www.nationalaffairs.com/publications/detail/education-and-men-without-work

    What we know is that there is an epidemic in the US of non-working men. This has been increasing, essentially monotonically and independent of outside factors (like recessions) from around 3% in 1965 to around 15% today.
    It's primarily a US phenomenon (the only other country that shows something similar is Italy, but *everyone* considers the Italian numbers to be so dodgy as to be meaningless). I could imagine that Russia in its worst 1990-2010 years might have looked the same, but I don't know for sure.
    There is no matching phenomenon for US women.
    The numbers are large enough that the usual immediate explanations people like to reach for (eg race or prison) are not essential factors.

    How do these men survive? Primarily via the "disability" benefits system, along with sponging off people around them. They mostly spend their days vaguely high and playing video games.

    Now there are different ways to look at this. The current way (yay feminism!) is basically to say "fsck them, they're men, they deserve nothing". You think that's extreme? Imagine that the president, or McDonalds, said "you know, many men are really suffering in this country. We need to help them out". Yeah...
    Since they mostly don't cause trouble (except for the occasional cleanup of another death of despair) they're invisible and ignorable.

    It is *probably* the case that some degree of this has been caused by precisely the point of this research, that women are better in the workforce FOR CURRENT JOBS. Men were more productive when the job required muscles, women are more productive when it requires smiling at (frequently idiotic) customers, or engaging in meaningless paper shuffling.

    It certainly hasn't helped that disability has stepped in as a fake parallel welfare system, though it's unclear if things would be better without that. We'd probably have just as many non-working men, only on welfare not disability, and the combination of direct welfare dependence and no daily dose of soma might make them a lot more of a problem for their neighbors than the current situation.

    So, as always, the question is: what do you want, ONCE CONSEQUENCES ARE TAKEN INTO ACCOUNT? We've gone from the Feminine Mystique and "the problem that has no name" being relevant to say 15% of women in the 50s and early 60s to the reverse situation among men today. Is this progress? Is it what we want?
    And even if you are happy to condemn men today for things that happened before they were born, remember that it's not infeasible that the female counterparts to these disposable men will be the first casualties of AI...

    1. Perry

      "Now there are different ways to look at this. The current way (yay feminism!) is basically to say "fsck them, they're men, they deserve nothing". "

      This is not what feminism (or feminists) say.

      1. name99

        Ah yes, the "no true scotsman" argument.

        The very fact that the word mansplaining exists, and that it's considered the height of wit to use it in multiple contexts, refutes your point.
        Or, likewise, for the way the men's movement, or the incel phenomenon, are considered jokes that don't even need to be thought through.

        This is a long article, but search for "Cassie Jaye" and read the relevant paragraphs:
        https://everythingstudies.com/2019/08/19/the-prince-and-the-figurehead/

        EVERY ideology starts off with beautiful dreams of making the world a better place. And EVERY ideology soon has to confront the fact that most people are much more interested in weaponizing the ideology right now than in an eventual better world.
        How the ideology deals with that fact separates the sheep from the goats.

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