1996-1997 indexDistributed October 7, 1996
Professors say marriage - not discrimination - creates gender wage gap
In a potentially controversial paper, two Brown University professors and a colleague examine how the decision to marry - not overt discrimination - may account for gender-specific wage differentials.
PROVIDENCE, R.I. -- Why do men earn more money than women on average? The widely accepted answer - gender-based discrimination - may not be the primary factor after all. Two Brown professors and a colleague believe the primary factor is an individual's decision to marry.
To illustrate their point, Brown professors Ronel Elul and Oscar Volij, working with Jose Silva-Reus of the University of Alicante, created an economic model that helps them analyze the tradeoffs a woman faces when she decides whether or not to marry. Measured in strictly economic terms, a woman who remains single and continues on a career path may command a higher salary and have a better earning potential than a woman who chooses the complexities of marriage and family. Their findings are detailed in the paper Will You Marry Me? A Perspective on the Gender Gap.
"There is a great deal of research into measuring discrimination," said Elul, assistant professor of economics, "but most evidence has shown that it is usually not the case that a man and a woman doing the same job are paid significantly different wages." What evidence there is for discrimination is often more subtle. "For example, people talk about glass ceilings, that women are pushed into certain occupations because of children and the fact that they don't have as much education as men. It is not clear whether this is caused by discrimination or by an endogenous decision as put forward by our model."
In the model, men marry younger women (a statistical fact). Because of that age difference, the older man, who began his career earlier than the woman, is more established in his job and earnings. Although economic considerations are often not deciding factors when men and women fall in love, they do play an important role in the decision to marry, according to the paper's authors.
The paper assumes that individuals are utility maximizers and will choose to marry when it is in their self-interest. Women are given all the bargaining power in the model. "If they have the advantage in the bargaining, they are going to be able to extract more benefits of marriage for themselves. As a result, the women feel less pressure to work. In fact, they are able to work for lesser pay and yet extract better benefits since they are in control of the bargaining," Elul said.
In the model, a woman who receives a proposal from a suitable man living in the same city will certainly accept. But if the man lives in a city where the woman's earning potential would be lower, then she faces a dilemma: She must either marry and receive a lower salary or reject the offer. "Her choice will depend on the terms of the husband's offer [that is, his savings and situation] as well as on other factors like wages and interest rates," the authors wrote. In most cases, the model demonstrates that women will accept the offer of marriage if the savings of the man are significant. As a result, they may accept a lower earning potential as part of their decision to marry, leading to the emergence of a gender wage gap.
Although there are potential benefits to marriage, the spouses do not have common interests, the authors conclude. The husband wants to consume as much as possible while he is still alive, while the wife would like to save some of her income for her lonely future. As a result, they bargain over their joint consumption.
The professors' willingness to dismiss discrimination as a primary factor in the rise of the gender wage gap has drawn criticism during public presentations of the paper. "When I first presented the idea for the paper, people thought I was a chauvinist," said Volij. But the authors feel the paper will stand up to the criticism that has been levied against it for making what many would consider politically incorrect statements. "We are pleased that we are offering a different perspective on the gender wage gap," Elul said.######