Economists discover the power of social standards

ohVER LE Women of the previous generation made substantial economic gains, although progress on other social equality measures has been uneven. Their average level of education has caught up with that of men in both rich and poor countries. Indeed, in most rich countries, the share of young women with a university degree is now higher than that of men. Income may have been less evenly distributed across the working population, but it has become more evenly distributed between men and women. In America, women make up nearly 30% of the tenth of the richest earners, up from 5% in the 1960s. However, progress is far from over. The differences in activity rates and remuneration persist. The nature of the barriers to further progress has changed. Although economics must pay close attention to these issues, especially given gender inequalities in the profession, it has not always been a great help in understanding them. This is changing, however, in a way that could transform the field.

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This development was manifested in January, in a conference given by Marianne Bertrand of the University of Chicago. In recent decades, gender gaps in the rich world have less and less to do with overt discrimination, she argued, and increasingly with the decisions of women. Their choice of degree subject is one of them. Jobs in science, technology, engineering and math have smaller gender pay gaps than others. But men are about twice as likely as women to graduate in these fields. Even more powerful is the effect of childbirth. The birth of a first child has virtually no effect on a man’s income trajectory. In contrast, a woman experiences a profound and lasting impact on her salary. The maternity penalty, suggested Bertrand, is by far the largest remaining contributor to gender gaps in labor markets.

Both men and women choose to become parents, of course. But the uneven effect on income reflects their different reactions to childbirth. Women are more likely to leave the workforce or move to part-time work. They often choose jobs that offer more flexibility and therefore accept lower wages. Some studies, for example, suggest that women take jobs with shorter journeys, to save time for their family responsibilities. In France, noted Ms. Bertrand, it is estimated that the sacrifice of income associated with such decisions explains 10 to 15% of the pay gap between men and women. It is the greater willingness of women to accept these compromises that explains the divergent fortunes on the labor market.

Economists, historically, have left the question unanswered, attributing such choices to rational self-interest. Maybe families decide that women have a comparative advantage in raising children and should take care of parenting while men focus on their careers. Gary Becker, the late Nobel Laureate economist, argued that households specialize in this way. Alternatively, perhaps the women’s choices simply reveal their preferences: for subjects other than math, for example; or for time spent looking after children, rather than long hours at the office. And such preferences, economists have generally assumed, must be taken for granted. De gustibus non est disputandum, they say: there is no accounting for tastes.

But maybe there is. As Ms. Bertrand noted in her lecture, other social sciences, such as social psychology, hold preferences to be socially determined. In this perspective, people’s choices are influenced by norms, which specify roles and behaviors appropriate for men and women. Survey data shows that across a wide range of rich and poor countries, both men and women support the idea that men should be the first in line for a vacancy when jobs are scarce. The level of support varies, for example, it is much higher in Egypt than in Switzerland. But even in Switzerland, around a fifth of women agreed with the statement, similar to the share of men. Gender gaps in math scores are larger in places where gender attitudes are more conservative. This suggests that social influences are important.

Challenging social norms is possible but costly. Men who sacrifice their careers to raise children while their partner is working can bear emotional costs, if, for example, they are seen as unmanly. Likewise, women who put their careers ahead of their families may face an emotional burden, related to their own guilt or the judgment of others, due to their decision to flout gender norms. Choices made under these pressures are always voluntary, but they reflect the influence of a self-sustaining gender bias. Human resources can be distributed throughout the economy in a way that reflects this bias, rather than the capabilities of people. Economists know that these biases exist. Historically, however, they have tended to view them as blunt descriptions of the state of the world, rather than evolving social forces that influence behavior.

Break through the patriarchy

Mitigating bias is not easy. Seemingly helpful interventions, such as generous maternity leave, can backfire if they reinforce the standard that women are caregivers. It is better, according to Ms. Bertrand, to focus on measures that do not have such implications, such as generous support for childcare. Her own research suggests that a mother’s activity status shapes her children’s perceptions of labor market norms. The behavior of the men around him matters too. Survey data in Japan suggests that many men feel positive about taking paternity leave. But, because they mistakenly believe that other men don’t feel the same way, they take less time than they would like. Companies could potentially improve the situation of their workers by choosing, for example, to make paternity leave compulsory.

Ms. Bertrand’s arguments may not seem particularly subversive. But they have implications that go beyond gender discrimination. His analysis suggests that the decision to participate in a market is not simply about maximizing utility given a set of tastes and constraints. Rather, markets are part of a set of fluid social forces that shape behavior. Economists cannot claim to understand markets until they understand these forces. â– 

This article appeared in the Finance & Economics section of the print edition under the title “Progress of a Kind”

About Marjorie C. Hudson

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