Monday, May 18, 2009

Stability in the Labor Market

Dan Hammermesh finds remarkable stability in the labor market:

One of the better-known biblical passages, Leviticus 27:1-7, lists the value of pledges of silver to the temple based on the value of a person: 50 shekels for a man between the ages of 20 and 60, 30 shekels for a woman of the same age, 15 shekels for a man over 60, and 10 shekels for a woman over 60. Hourly wage rates of workers in the U.S. in 2008 differed greatly from the ratios implied by Leviticus. The average female worker between 20 and 60 years old earns, per hour, nearly 80 percent of a male worker the same age, not 60 percent; and the average older male worker earns nearly as much per hour as the average male worker between 20 and 60.

Most older men and women don’t participate in the labor force, and fewer 20- to 60-year-old women work than men that age. Take all U.S. citizens in each age/sex group, whether or not they work, and assume that men aged 20 to 60 earned 50 shekels per time period in 2008. Then women aged 20 to 60 earned 34 shekels, men 61 plus earned 14 shekels, and women 61 plus earned 7 shekels. Once we ignore differences in labor-force participation, the earnings ratios are not that far from what was expected 3,000 years ago.

Could part of this wage gap be due to the fact that some employers may assume a man, in general, has more work experience than a woman holding everything else constant and then just apply that generality to all men in general?
This was a really entertaining way to compare the wages of different aged males and females. The fact that the numbers are so close to what was stated in The Bible has to be a coincidence, however. It seems to me that the researcher just happened to take his measurements at precisely the right time. For example, I would find it extremely hard to believe that the relative wages of women in the United States have actually stayed constant from 1850 until now. Also, had this research been done fifty years from now, I am sure the results would be much different. I would bet that the category for women between the ages of 20 and 60 will be at least 40 within the next twenty years, and perhaps very close to 50.
Hard to believe wage differences have changed little over 3000 years. However, after hearing Bryce talk about how a woman is more likely to leave a job to have a child this seems to make more sense.
Wage discrimination thousands of years ago? Not surprising. Because we live in a society that is so concerned with physical attributes, as Bryce has pointed out with about a dozen articles, we assume that men of tall stature, good looks, and attractive faces make the most on average. Also account for the fact that women take maternal leave and they become last attractive labor prospects. Because life expectancy has increased so greatly in the 20th century, I would expect to see many more working women, making equally high wages, once they have passed the years of possible child birth in the 21st century.
*less attractive labor prospects
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