Favorite Undergrad Papers: The Gender Pay Gap as a Natural Feature of a Free Society

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This was not actually a college paper. This was a research proposal for a scholarship program with the American Enterprise Institute. One of my Honors professors (Dr. Raeder) sponsored me, and had I been awarded the scholarship, I would have written this research paper over the course of a school year and defended it before a panel of experts in Washington, D.C. Sadly I was not selected for the program and, while I would have loved to have researched this topic and written the paper anyway, I just did not have enough motivation to do it without the scholarship money and the deadlines for the program. By the way, if you are interested in reading any of the sources I used, I highly recommend Discrimination and Disparities by Thomas Sowell. His books are fascinating, eyeopening, loaded with real-world examples of what he argues, and you will learn a lot from reading him.

Prospectus

AEI V&C 2018-2019 YOUNG SCHOLAR AWARDS PROGRAM

The Gender Pay Gap as a Natural Feature of a Free Society

Timothy Fowler

Biblical & Theological Studies Major

Palm Beach Atlantic University – May 2019

Summary:

This paper argues that the gender pay gap in the United States need not be eliminated since it is a natural feature of a free society, since it is not an injustice needing to be redressed, and since the economic benefits of closing the gap by government regulation do not outweigh the benefits of a free market. The paper will explore each of those three areas of significance in the order listed. First, matters of public policy will be considered with reference especially to the U. S. Constitution and an originalist interpretation of it. Second, matters of morality will be considered with reference to the values of the conservative Judeo-Christian tradition and the conceptions of equality and justice posed by Hayek and Locke. Third, matters of economics will be considered with reference to the free market economy as conceived by thinkers such as Smith, Hayek, and Sowell. The most crucial evidence to be considered will be two psychological studies that suggest men and women are the most disparate in personality in developed societies (Schmitt, Voracek, Realo, & Allik, 2008; Giudice, Booth, & Iwring, 2012).

The Gender Pay Gap as a Natural Feature of a Free Society

Gender equity is a subject of tremendous controversy in the United States right now, and with respect to economics and public policy, the gender pay gap is one of the central areas of the gender equity dispute. This paper will argue that the gender pay gap in America need not be eliminated for three reasons: it is a natural feature of a free society, it is not a moral injustice needing redress, and the potential economic benefits of eliminating the gap by government regulation do not outweigh the economic benefits of maintaining the free market.

The thesis is structured according to the three areas of significance related to this topic. First, this topic has significance for public policy. If it is true that the pay gap ought to be eliminated (either for the moral or economic reasons discussed below), then this raises a number of questions concerning the government’s role in redressing the issue. Some of these questions, for example, may include, should the government be involved in this issue at all? Should the government impose gender quotas on businesses and educational institutions? Should wages be regulated for the purpose of enforcing equal pay for equal work? Do discrimination laws need to be reformed or expanded (for example, to eliminate all statistical discrimination)?

Second, this topic has moral significance. There is much discussion in America lately over moral issues such as freedom, justice, and human rights, and the gender pay gap is relevant to each of these moral issues. Some would argue the pay gap is an injustice toward women caused by sexist cultural attitudes that do not fully acknowledge their humanity. Others would argue that the pay gap is neither unjust nor dehumanizing but is rather a consequence of freedom; to coercively close the gender pay gap by government involvement would be a violation of freedom.

Third, this topic has economic significance. Some would argue that closing the gender pay gap would stimulate economic growth significantly, increasing the GDP of the United States and decreasing the poverty rate among women (Schulze, 2018). Without a doubt, these are some enticing benefits. However, most of the methods recommended for closing the gap involve some degree of government regulation over the market (such as those mentioned in the public policy section above), and as is usually the case with economics, government regulation will harm the American economy in the long-run more than it will help.

Some of the relevant research for this topic includes Why Gender Matters in Economics by Eswaran (2014), in which the author summarizes laboratory research on gender differences (e.g. competitiveness, riskiness, and altruistic tendencies), explains three different types of discrimination (taste for discrimination, statistical discrimination, and efficiency wage theory), and explores a number of different causes and solutions for the gender pay gap. Another relevant source is Understanding the Gender Gap by Goldin (1990), which is referenced in Eswaran (2014). This book is a thorough analysis of the gender pay gap from a historical, economical, and political perspective, and it supplies pertinent data and statistics.

Coming from a more politically conservative perspective than the above sources, Farrell (2005) also gives a thorough analysis of the pertinent data and causes behind the gender gap, as well as some advice to women who wish to earn more in the current economic climate. Sowell (2018) has a useful book called Discrimination and Disparities, although it is not written specifically on gender disparities. Some additional sources that conservatives (like Christina Hoff Sommers) have recently pointed to in their arguments include the psychological study conducted by Schmitt, Voracek, Realo, and Allik (2008), as well as a related psychological study conducted by Giudice, Booth, and Iwring (2012). Both studies have provided evidence that gender differences worldwide are the most disparate in the most advanced societies, which could suggest that the gender pay gap is a natural feature of a free society as men and women freely choose the work that they most desire. (Incidentally, it is the implications of these two studies that inspired the thesis for this paper.)

Some of the questions that will be explored in this paper include: Is it wrong for employers to increase the efficiency of their businesses by favoring one gender over another for employment based on statistical discrimination? Are the personalities of men and women always more disparate in free societies than in societies that are less free? To what extent is the gender pay gap accounted for by innate differences between men and women and to what extent is it caused by sexism on an individual or societal level? Would closing the gender pay gap (regardless of means) significantly increase the GDP of the United States and decrease the poverty rate among women as has been suggested by some researchers?

The research involved in answering these questions will be largely qualitative, although some degree of quantitative research may be necessary to corroborate (or refute) data given by other researchers (such as the two psychological studies mentioned above since they are crucial to the thesis of this paper). Surveys may be helpful for determining how extensive are each of the three types of discrimination in the United States.

Matters of public policy will be guided by an originalist understanding of the U. S. Constitution (with the help of influential works such as Locke and The Federalist Papers). Matters of morality will be guided by the values of a conservative Judeo-Christian worldview (the author’s own personal faith may be considered as belonging to the tradition of the Reformed Baptists, such as Edwards, MacArthur, and Grudem). Matters of economics will be guided by the values of a free market economy (drawing heavily on the works of Sowell and Hayek).

References

Eswaran, M. (2014). Why gender matters in economics. NJ: Princeton.

Farrell, W. (2005). Why men earn more: The startling truth behind the pay gap—and what women can do about it. New York: American Management Association.

Furchtgott-Roth, D. Women’s figures: An illustrated guide to the economic progress of women in America. (2012). Washington, D. C., American Enterprise Institute for Public Policy Research.

del Giudice, M., Booth, T., & Iwring., P. (2012). The distance between Mars and Venus: Measuring global sex differences in personality. PLoS ONE 7(1), 1-8. doi:10.1371/journal.pone.0029265.

Goldin, C. (1990). NBER Series on Long-Term Factors in Economic Development. Understanding the gender gap: An economic history of American women. New York: Oxford.

Peterson, J., & Brown, D. (Eds.), (1994). The economic status of women under capitalism: Institutional economics and feminist theory. Aldershot, UK: Edward Elgar.

Schmitt, D. P., Voracek, M., Realo, A., & Allik, J. (2008). Why can’t a man be more like a woman? Sex differences in big five personality traits across 55 cultures. Journal of Personality and Social Psychology 94(1), 168-182. doi:10.1037/0022-3514.94.1.168

Schulze, E. (2018, March 8). Closing the gender pay gap could have big economic benefits. CNBC. Retrieved from https://www.cnbc.com/2018/03/08/closing-the-gender-pay-gap-could-have-big-economic-benefits.html

Siltanen, J. (1994). Cambridge Studies in Work and Social Inequality: Vol. 1. Locating gender: Occupational segregation, wages and domestic responsibilities. London: UCL.

Sowell, T. (2018). Discrimination and disparities. New York: Basic Books.

Williams, C. L. (1989). Gender differences at work: Women and men in nontraditional occupations. Berkeley: University of California.

Young, K. (Ed.). (1988). Women and economic development: Local, regional and national planning strategies. Oxford: Berg.

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