The Gender Pay Gap In The Economics Profession

New research by David Blackaby, Alison Booth, and Jeff Frank reveals that a female academic economist in the UK – of the same ability and productivity as a male academic economist – still gets paid 9% less on average.

Their study, published in the February 2005 issue of the Economic Journal, suggests that much of the explanation for this lies in ''outside offers''. Comparably qualified men get significantly more offers than women for positions in other universities. What''s more, when a man gets an outside offer, his current university is much more likely to match the offer with a salary increase. Numerous studies have shown that women continue to be paid less than men. But it is never entirely clear that these studies compare like with like. By looking at academic economists, and adjusting the results for personal characteristics such as age and marital status, these researchers find that – on a like for like basis – female academic economists in the UK earn 11% less than men.

But uniquely, the researchers also have good measures of ability and productivity in terms of class of undergraduate degree, publication records, records in getting outside funded research grants, and teaching quality. For example, on a like for like basis, women publish less than comparable men.

But even taking all these factors into account, women still get paid 9% less than equally productive men. This is of course significantly less than the headline figures often quoted in the press, but it does take full account of any productivity differences between men and women. Some of this pay gap is due to the lower rates of promotion for women compared to equally productive men. But even within an academic rank (such as ''lecturer'' or ''professor''), women get 5% less than comparable men.

The researchers also have information on career breaks and non-academic experience. While taking a career break lowers future salary levels, this has no significant impact in explaining the gender gap. Neither does differential non-academic experience. But what does explain some of the gap is outside offers.

Interestingly, the Massachusetts Institute of Technology examined the status of its female faculty and found that outside offers, and the university response to them, played a major role in maintaining disparities, just as in this study over all UK universities. A senior manager in a UK university explained how outside offers were an objective way of determining pay rises, and therefore justifiable to remuneration committees. But this ignores the problem that arises if women (or ethnic minorities or other groups) receive fewer outside offers.

In the case of women, this may be because they are viewed as ''loyal servants'', who cannot easily move due to family commitments. They get fewer outside offers since other universities do not believe that they will take the job, and – if they do get an offer – their current employer does not respond with a matching increase since it does not think they will actually move in any case.

The persistence of pay gaps for women and ethnic minorities – given the strong stance of the law and the apparent support for equal opportunities by employers such as universities – is surprising. This research shows an important mechanism for the continuance of such gaps and the subtle effects of ''unintended consequences''. The only way to ensure the ending of discriminatory pay gaps is to have proper, unbiased, independent measures of productivity in a well-designed remuneration system. For publicly funded institutions such as universities, these systems need to be monitored and perhaps even run from outside.

''Outside Offers and the Gender Pay Gap: Empirical Evidence from the UK Academic Labour Market'' by Alison Booth, Jeff Frank and David Blackaby is published in the February 2005 issue of the Economic Journal. Booth is at the University of Essex and the Australian National University; Frank is at Royal Holloway College, University of London; and Blackaby is at University of Wales Swansea.