Are women underpaid?

The New Economist blogs on "Were women's wages customary"- a paper by Joyce Burnett of Wabash College on the gap between the wages paid to men and women ("Throughout history and all over the world women have earned lower wages than men"). She asks whether this reflected custom or market forces.

The best way to resolve the question of who was right is to look for evidence that is not the expression of someone’s opinion, but is direct evidence from output. Evidence from production functions gives us such direct evidence. The available evidence from production functions uniformly indicates that women had lower marginal productivity than men.

Using census data to estimate the marginal products of men and women in the US in 1860, Craig and Field-Hendrey find that women were about 60 percent as productive as men in agriculture, and 40 to 50 percent as productive in manufacturing. Cox and Nye use data on nineteenth-century French manufacturing firms to estimate the marginal
product of male and female workers and find productivity ratios ranging from 0.37 to 0.63. When they test for wage discrimination, they find no evidence of wage discrimination.

Benjamin and Brandt use a 1936 household survey in China to estimate the contribution of men and women to family income in general and crop income specifically; they find that women contributed 62 percent as much as men to farm production.60 Women are also less productive than men in agriculture in developing countries today; Jacoby finds that women were 46 percent as productive as men in Peruvian agriculture in the 1980s. While the estimates of the productivity ratio vary depending on the industry and location, all of the estimates suggest that women were substantially less productive than men in manual labor.

Thus I conclude that women’s wages, at least in competitive sectors such as agriculture and textile manufacturing, were not customary in the sense that they were lower than women’s productivity.

In the comments, knzn asks whether this confuses cause and effect: maybe because custom set men's wages higher, they were employed in high-productivity jobs while women were relegated to low-productivity jobs. I don't think that would survive in a competitive market where arbitrage would result in low-wage women being employed in high-productivity jobs, so that their wages get bid up. Lafayette wonders whether the difference may have been because the women could not do heavy manual labor. If that is the case, we would see the gap close as mechanization reduces the need for muscle vs brain.

Here is a previous post on this topic.

Two comments:

1. I am pretty sure there is discrimination against women, as there has been against almost any group you can think of. The case of Joan Robinson is a good example. She helped found the theory of monopolistic competition, and won the Cambridge controversy ('As historian Mark Blaug put it, Samuelson made a "declaration of unconditional surrender"'), and yet never won the Nobel and did not become a full professor at Cambridge University until 1965, when she was 62 years old. ('Perhaps not coincidentally, this was the year her husband retired from Cambridge.')

2. The wages reflect poductivity in the market, which is fair. However, I expect this understates the total output of women, which includes unpaid labor at home.