Human Capital Models and the Gender Pay Gap

Abstract

This paper provides a commentary on the article by Lips (2012), "The Gender Pay Gap: Challenging the Rationalizations, Perceived Equity, Discrimination, and the Limits of Human Capital Models." It provides some economic background for human capital models that try to explain gender pay gaps, and discusses the limitations of the models. It assesses some of Lips' criticisms of the model. In contrast to Lips, the author believes that human capital theorists are generally aware of the limitations of their models, and she believes that human capital models make a valuable contribution to the literature on the gender pay gap. The author also uses her own research to illustrate how human capital variables can be combined with variables from psychology and other fields to try to understand the salary differences between men and women in specific professions. The Appendix provides a list of some 2011 and 2012 studies that examine gender differences in pay in various countries and the types of data used.

Once in the Door: Gender, Tryouts, and the Initial Salaries of Managers

“…Also, organizational decision makers know more about candidate characteristics than do researchers. So even when scholars include detailed measures of candidates (e.g., grades and educational credentials) in models of salary determination, the fact that women earn less than men may be attributed to quality differences among applicants unknown to researchers but observable to employers (for a discussion of these asymmetry issues see Lips 2013;Olson 2013).…”

Más allá de la brecha salarial de género

“…At structural and aggregate levels, the explanations for gender pay gap in recent times focus mainly on the shifts in the industrial structure and the changes in both industrial relations and employment arrangements driven by skill-biased technology change and globalization. The literature on gender pay gap -see, Olson (2013), for a recent review in which many countries are considered-provides answers that can indicate concrete actions to undertake in order to reduce the pay gap between men and women, a determinant of gender inequality which has proven to be both persistent and universal. The gender wage gap is accounted for to a substantial degree by the gender composition of occupations and industries.…”

Gender disparities in European labour markets: A comparison of conditions for men and women in paid employment

“…Nevertheless, gender disparities in terms of opportunities, security and participation in the labour market continue to be a real cause for concern in developed countries, even though they usually affect countries with higher unemployment rates and less developed welfare systems. Many authors have studied labour market gender gaps to identify the influence of observable factors, such as human capital characteristics (Polacheck and Xiang, 2015;Olson, 2012), and how much remains unexplained after these are controlled for. This unexplained element is usually attributed to discrimination, even though not all unexplained factors imply discrimination.…”