The great sexual salary divide

The Economics of Equal Opportunities
May 24, 1996

While the ethical case for equal opportunities is relatively easy to accept (at least on the ideological level), the notion that equality is an expensive luxury, unaffordable by a competitive economy, remains widespread. It is rather like housework: more people agree that housework ought to be shared than are willing to do so in practice. A litany of excuses erects practical barriers, conveniently leaving the moral case intact.

The question underlying this weighty but scholarly volume is what can economic analysis tell us about the fate and impact of equal opportunity policies? Underlying this is a somewhat more sinister question, which is whether neo-classical economies can cope with issues of equality and discrimination at all. To a neoclassical economist, discrimination relates to that portion of the observed wage gap between men and women which cannot be attributed to differences in the endowment of wage-earning characteristics. Even different rewards for the same characteristics can be explained away as a problems with measurement and unobserved variables. Anything else is liable to be seen as choice; couples jointly optimise their relationship to the labour market by having one fulltime job (his) and one parttime job (hers); women's preferences for being at home are different from men's.

The old bogey that women choose their own oppression is as basic to the conceptual vocabulary of economics as that well-known figure, rational economic man. As various contributors to this volume amply demonstrate, rational economic man as a historical relict has been revamped rather than retired. Assumptions of choice remain crucial and lie at the heart of the case against policy intervention. If, on the other hand, people do not choose to be discriminated against, then it can be argued that there is some inefficiency in the market that needs correcting.

The tension between empirical evidence of discrimination and the blinkered vision of economics is explored in an excellent chapter by Jane Humphries on "Economics, gender and equal opportunities". The other 16 chapters include an analysis by Sally Holtermann of costs and benefits to British employers of equal opportunity measures; a look at where the costs of women's unequal treatment actually fall by Irene Bruegel and Diane Perrons; an exploration of the implications for equal opportunities policies of gender segregation in the workplace, and at attempt by Janneke Plantenga to unravel the mystery of Dutch women who appear to regard part-time work as emancipating when their British sisters have proved that it is not.

The recent furore about boys' educational underachievement provokes an interesting chapter by Alan Felstead that begins and ends with the paradox that the superior educational achievements of girls at 16-18 years are not matched by what happens when they enter the labour force. One explanation is that government-funded training schemes operate criteria and offer opportunities that reinforce the old tradition of unequal access. Market forces are not enough.

But the real question people will expect this book to answer is likely to be the one about the impact of equal opportunity policies themselves. Given that these have been adopted in nearly all industrialised countries over the past 25 years, what evidence is there that they have achieved their aims? Lacking the power of a randomised experiment, all we can do is critically search the landscape of international comparisons. This is the aim of Shirley Dex and Roger Sewell's chapter. They find the exercise fraught with difficulty, but they do manage to emerge with some worthwhile conclusions. For example, equal pay legislation is consistently associated with improvements to women's occupational status, but does not seem to have much impact on the female-to-male earnings ratio. Public sector spending is even more effective. Both central bargaining and a minimum wage reduce women's chances of low pay.

The Economics of Equal Opportunities is a valuable compendium, and will probably be much consulted. But do not expect to dip into it for easy answers. Its existence rather makes the case for someone to write a definite and accessible text on just what has happened to women economically. Has all the fuss really been worth it?

Ann Oakley is professor of sociology and social policy, Institute of Education, University of London.

The Economics of Equal Opportunities

Editor - Jane Humphries and Jill Rubery
ISBN - 1 870358 47 3
Publisher - Equal Opportunities Commission
Price - £25.00
Pages - 436

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