Morning Must-Read: David G. Blanchflower and Adam S. Posen: Wages and Labor Market Slack: Making the Dual Mandate Operational
Bonus Monday Smackdown Watch: Ryan Avent vs. Clive Crook on Thomas Piketty's "Capital in the Twenty-First Century"

Morning Must-Read: Evan Soltas: Wage Discrimination

Even Soltas: Yes, the Pay Gap Persists: "Mark Perry and Andrew Biggs... at the American Enterprise Institute argued... that no pay gap exists between men and women after you control for the different choices they make.... I took issue.... I found a persistent pay gap on the order of 4 to 10%.... And I also wrote that it's probably wrong to take all these [controls] as unaffected by pressure or discrimination. Perry responded... that the pay gap might persist because of gender differences in risk tolerance.... [and] because professional athletes and musicians are paid well and tend to be men. Sadly, his argument makes no sense....

  1. My regression has 'fixed effects' for occupation. This means that it fully accounts for any occupation-level compensating differentials for risk. So everything Perry and Biggs write about men dying in forestry, or what have you--yeah, my analysis accounts for that. That's what a fixed effect is.

  2. My analysis is of workers paid hourly wages. Professional athletes and musicians are not hourly workers....

Look, I understand why Perry and Biggs have to respond.... They misrepresented the research consensus on the gender pay gap in a major newspaper, and I called them out on it.... The 23-percent number reflects more than discrimination. But if they are going to try to explain away the pay gap, they're going to need to try a bit harder than this.