Monday, November 5, 2018

The weekly earnings gap can be explained entirely by differences in operator choices of hours, schedules, and routes

Earlier this year, I highlighted a study in Performance differentials in bias and discrimination free systems.

Across the globe, in one of the best replicated findings in economics and psychology, there is no gender wage gap when you take into account all the relevant variables. Men and women end up earning different amounts at work because they end up making different choices, not because they are discriminated against.

In that earlier example, the researchers used the natural experiment of Uber where there are no people interactions in terms of who gets what routes, or when to work, etc. Everything is up to the individual driver. They can't be discriminated against. And what the researchers found was that, in this impossible to discriminate environment, men earned 7% more than women. Read the original post for the details.

Along comes another less perfect example, but with the same finding. From Why Do Women Earn Less Than Men? Evidence from Bus and Train Operators by V. Bolotny and N. Emanuel. From the Abstract:
Even in a unionized environment, where work tasks are similar, hourly wages are identical, and tenure dictates promotions, female workers earn $0.89 on the male-worker dollar (weekly earnings). We use confidential administrative data on bus and train operators from the Massachusetts Bay Transportation Authority (MBTA) to show that the weekly earnings gap can be explained entirely by the workplace choices that women and men make. Women value time and flexibility more than men. Women take more unpaid time off using the Family Medical Leave Act (FMLA) and work fewer overtime hours than men. Men and women plan to work similar overtime hours when they are scheduled three months in advance, but men actually work nearly 50% more overtime hours than women. Women with dependents value time away from work more than do men with dependents. When selecting work schedules, women try to avoid weekend, holiday, and split shifts more than men. To avoid unfavorable work times, women prioritize their schedules over route safety and select routes with a higher probability of accidents. Women are less likely than men to game the scheduling system by trading off work hours at regular wages for overtime hours at premium wages. Conditional on seniority, which dictates choice sets, the weekly earnings gap can be explained entirely by differences in operator choices of hours, schedules, and routes.

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