A draft post from August 4, 2010 with minor edits:
In Search of Balance
This post is a little half essay considering the question of why we have a society where women's earnings remain much less than that of men, on average, something that we largely know the proximate causes of (women tend to interrupt their careers and choose to work less to raise children), how we got there, something we also mostly know (via an oversimplified historical review), and what in our society has failed to adapt sufficiently from a pre-feminist to a modern society creating multiple problems in our society that we face today (a system the overemphasizes total commitment to full time work and unreasonably favors waiting to start families until one's life is fully established).
I consider what a better society might look like, but acknowledge the difficulties in refining that vision and in getting from here to there, because while we know the proximate causes of our situation, the deeper causes are not clear.
Married Women With Property
At the end of the 19th century and early 20th century, during what is commonly known as the Progressive Era, the Married Women with Property acts made it legal for women to own property, enter into contracts, sue and be sued, and run businesses on a legally equal basis with men. Judicial divorce for cause also became available around this time. Before then, divorce had only been available by legislative decree.
While these acts ended the formal status of women as property, instead of property owners, the effect of this formal change in the economy was quite modest.
The Impact Of Civil Rights Laws
The next big step came in the 1960s when gender discrimination in employment and education was made illegal except when gender was a bona fide qualification for the job (a narrow category of jobs).
Like most of the anti-discrimination laws, the number of suits brought to enforce the law on the hiring side has been very small. Most of the lawsuits involve employees who say that there were fired or not promoted for wrongful reasons, because proving that you should have gotten a job but for discrimination, is very difficult, and proving up damages is even harder.
But, the symbolic effect was dramatic. Before the laws were passed, K-12 teaching, working as a librarian, nursing, secretarial work, waitressing, childcare, and house cleaning were the primary job opportunities for women. Now, while the traditionally female occupations remain female dominated, women have flooded into a wide variety of other professions.
In professions that do not call for a math/science background or "structural vision" like the skilled trades, most professions have come close to 50-50 in gender makeup among younger workers who received the full benefit of the anti-discrimination laws, and professions do (like medical doctors and engineers) typically have 25%-35% female employees among younger workers.
Indeed, once the floodgates were opened, formal discrimination against women in the workplace has dropped much faster than discrimination based on race or ethnicity.
Some interpretations of this historic change, noting that the Married Women With Property Acts combined with the free market pressures for women to work didn't produce all that much change, look to additional causes, like the disruption of traditional gender based job discrimination caused by the labor shortages of World War II. Another possible factor was technology. Mass produced ready to wear clothing, easy care fabrics, washers and dryers, grocery store convenience foods, dishwashers, vacuum cleaners and more reduced the amount of time and skill necessary to be a homemaker. The Pill and other contraceptive advances, along with infant formula made it easier to be a married woman to spend less of her life pregnant or caring for infants, and easier to delegate those duties for young children.
The Rise and Fall of Comparable Work
The next wave of the gender discrimination in employment effort was the fight for "comparable pay for comparable worth" of the 1970s and early 1980s. This effort flowed from the observation that jobs that took similar skill that were female employee dominated tended to pay less than similar jobs that had more male employees.
For example, high school teachers, who are more often male, tend to make more than elementary school teachers, who are overwhelmingly female, despite having similar educational requirements, certifications and working hours. Similarly, female pro-basketball players make far less money than male pro-basketball players.
The effort largely failed. Determining what kinds of work were comparable, or how to equalize pay and conditions in different careers that often involved different employers in a competitive labor market, were challenges that were never overcome.
The High Cost Of Parenting Rather Than Working
The big focus today is on the penalty employees pay for working reduced hours or taking time off from work to care for children. David Leonhardt at the New York Times
explains:
There are still only 15 Fortune 500 companies with a female chief executive. Men dominate the next rungs of management in most fields, too. Over all, full-time female workers make a whopping 23 percent less on average than full-time male workers. . . .
Many more women take time off from work. Many more women work part time at some point in their careers. Many more women can’t get to work early or stay late. And our economy exacts a terribly steep price for any time away from work — in both pay and promotions. People often cannot just pick up where they have left off. Entire career paths are closed off. The hit to earnings is permanent. . . .
As a result, outright sexism is no longer the main barrier to gender equality. The main barrier is the harsh price most workers pay for pursuing anything other than the old-fashioned career path. “Women do almost as well as men today,” Ms. Waldfogel said, “as long as they don’t have children.” . . .
A recent study of business school graduates from the University of Chicago found that in the early years after graduating, men and women had “nearly identical labor incomes and weekly hours worked.” Men and women also paid a similar career price for taking off or working part time. Women, however, were vastly more likely to do so.
As a result, 15 years after graduation, the men were making about 75 percent more than the women. The study — done by Marianne Bertrand, Claudia Goldin and Lawrence Katz — did find one subgroup of women whose careers resembled those of men: women who had no children and never took time off. . . .
Last year, 40.2 percent of married women with children under 3 years old were outside the labor force, up from a low of 38.6 percent in 1998. The increase, according to a Bureau of Labor Statistics analysis, “occurred across all educational levels and, for most groups, by about the same magnitude.” By contrast, women without children at home have continued to join the work force in growing numbers.
The University of Chicago business school data look very similar to the results of a similar study of University of Michigan Law school graduates that I have seen (after having participated in the study myself).
The New York Times article isn't a detailed statistical analysis, but my strong suspicion is that the penalty for leaving the workforce is much higher in skilled professions that aren't dominated by women, than in unskilled professions or professions that were traditionally female dominated.
There isn't much of a penalty to be paid for taking time off from your career if you were retail salesperson or newspaper deliverer or a midwife. But, if a job is skilled and not traditionally female dominated, the price is indeed very high.
A Comparative Perspective
Countries that have more gender equality in the workforce, mostly in Europe, have done so by providing a great deal of economic support for working parents. There is easy access to affordable quality day care. There are mandatory vacations and state imposed limitations on working hours. There is paid maternity leave.
Still, the New York Times article notes that a great effort to support women in the workforce in Europe doesn't necessarily achieve that result: "In the European countries with much more generous parental leave laws, women remain far behind men on career ladders."
In contrast, in Japan, where the government once actively encouraged women to stay out of the work force, and since then has taken essentially the same path as the United States, in officially banning discrimination on the basis of gender, but providing parents who take time off to have children with very little support, the results have been similar.
Japanese women who never marry and have children are much better off than they used to be in the Japanese workforce, close to a point that is comparable to men, although probably not quite as close to parity as in the United States. But, Japanese women who marry and have kids (and overwhelmingly Japanese women who marry do have kids), effectively stunt their career prospects for life.
Job structure helps maintain this distinction. Japanese salarymen (basically people with full time career jobs) are not only expect to work long hours (although the average American now works longer hours), but also to spend large chunks of off the clock time socializing away from home with co-workers. Even if a salaryman only works 50 hours a week, he may be expected to spend 70 hours or more a week away from home with co-workers. This makes it impossible for that person to spend much time with family and adequately raise children.
The Macro-Level Trade Off Of Work and Marriage Marriage Stability
There is a trade off. The rates at which Europeans couples don't marry even if they have children, or divorce after they are married, is very high compared to that of the college educated Americans or the Japanese. Americans who are high school dropouts, or have only high school educations, probably in part because of the low economic penalty for having children in their jobs, tend to not marry even if they have children or divorce after they are married at similar rates to adults.
In other words, marriage is an economic partnership for college educated Americans and the Japanese to a much greater extent than it is far less educated Americans and for Europeans. There is good circumstantial evidence that the glue that holds marriages together has a large component of economic reliance.
For a college educated American woman, or a Japanese woman, getting married and having kids usually means foregoing immense future earnings and relying on a spouse to provide disproportionate economic support. Their spouses get the privilege of being able to devote large numbers of hours away from home which permits them to advance their careers; something that they couldn't do as true single parents with children at home. The modern theory of alimony in divorce (in academic circles, if not necessarily in courtroom application) attempts to compensate a divorcing spouse, almost always a woman, for the economic sacrifices that she made by getting married, having kids and accepting harm to a career in the process.
In practice, because alimony rarely does compensate for this economic setback, there is intense economic pressure to remarry, and most women who cannot or do not remarry suffer intense economic hardship until they do, while their male ex-spouses usually come out no worse economically after the split, or at least, not a lot worse, and often are better off economically.
A desire for couples to marry and stay married is not just quaint traditionalism. There is overwhelming evidence that staying married is economically, medically and emotionally good for couples, and good for their children, when it is done. Divorce and parenting split between two households is not the worst thing that can happen to a child or a parent, but it is rarely ideal. And, if at some fundamental statistically observable level, an important component marriage stability is largely a function of economics, rather than of making good choices about who to marry or relationship skills (although those may be factors as well), then it is worth thinking about how the economy can be changes in ways that support, rather than undermine marriages.
If changing employment law, or divorce law, or tax law, or the customary way that jobs or job benefits are structured, or the social safety net programs designed, or additional government spending to support families can make marriages, or at least marriages in which they are children, more stable, those changes are worth seriously considering, even if that means some sacrifices towards some other objectives.
Stable marriages are not, of course, a absolute priority. We don't want people to be economically forced to stay in abusive relationships that are destructive for everyone. On the other hand, even in the case of marriages at risk of becoming abusive, if some change in policy can prevent relationships that might have become abusive from heading in that direction, like strong economic cushions for families in financial stress or a more pro-active mental health and substance abuse treatment system, it is worth considerable attention.
Also, because of the long term benefits of stable marriages for couples, and because of the benefits of stable marriage for children, it isn't unreasonable to consider incentives to raise the bar for ending a marriage with children in some way even if that produces some level of discomfort for one or both spouses greater than the one under the current "no fault" unilateral divorce system if it can be done in a way that still allows destructive marriages to end, and minimizes the harm caused by the process of ending those marriages that can't survive.
Why Doesn't The Economy Generate More Equality?
From an economics perspective, the hardest question is why there is so much of a penalty for leaving the workplace.
The starting point in most economic inquiries is to assume that a competitive marketplace, like the job market is related in some meaningful way to value added to an enterprise, adjusted for the fact that jobs that can be filled by the same person usually have similar compensation across that job category.
The mechanism by which standard microeconomic theory expects this to happen is that if an employer can pay more than the competition and get workers who add more value than the increased pay, then they will because that will increase their profits.
If a male lawyer who has taken no time off and a female lawyer who took five years off to raise kids can both generate $180 per billable hour of revenues minus overhead, and it costs $90 per billable hour to hire the man, and $60 per billable hour to hire the woman, law firms should be hiring women in droves until the pay of men per billable hour falls, and the pay of women per billable hour rises.
This isn't what happens in real life. The question then, is why it isn't the case in real life. There are basically three likely possibilities.
1. Law firms and similar institutions are stupid, tradition bound institutions that don't know what is good for them.
Nobody has tried to pay women who have taken time off from the workforce what they are really worth, and as a result, the status quo has continued. But, as soon as some smart, up and coming firm manager or founder wakes up and smells the coffee, the new business model will crush the competition.
2. This is a classic case of price discrimination, the usual suspect any time the economy acts in an unexpected way.
Maybe married women and women with children are generally willing to work for much less as long as an employer will be flexible, and that willingness weakens their position in compensation negotiations, and that influences the market price for part-time work and salaries for people who have taken time off in their careers. Men who have done the same are simply victims of women who influence the market price for their work, even though the penalty might not be so high if those professions were actually male dominated (witness the academic tradition of formerly male dominated sabbaticals).
Another factor is that married couples tend to see women's jobs as secondary, and as a result think about the rewards of working as net of their family's marginal tax rate, which has already been boosted by a spouse, and net of day care costs which are allocated psychologically solely to their earnings. One line of suggestive evidence that this is the case comes from the transition of the United Kingdom from a household based progressive income tax return system to an individual based progressive income tax return system. The change lowered the tax burden imposed on a stay at home spouse who enters the work force and led to higher participation rates for women in the workforce.
High marginal tax rates, along with declining marginal utility of additional income, may also help explain why college educated professional women bargain less hard for pay for part-time or limited hour work after having had children than men do at full time jobs. The after tax benefits of higher pay rates, net of day care costs and high marginal tax rates due to a college educated professional husband's income are smaller than those of the husband who sees his job as a first job benefiting from low progressive tax rates and not allocating day care costs to the job psychologically.
3. Part-time professional workers, workers who want to work limited hours, and workers who have taken time off from their careers to raise children are genuinely less valuable in the marketplace than full time workers who have uninterrupted careers.
In some professions, this is genuinely plausible. One of the things that big firm lawyers get paid big bucks to do is to be available to put everything else in their lives on hold when a big deal needs to be documented quickly or a trial is coming up or something else needs intense attention. Since everyone involved is working in real time, an ability to put in more hours in the limited numbers of day before a brief is due, or a deposition must be taken, or a document must be written translated into better client results. The demand for these intense bouts of work is unpredictable, so total commitment is required.
Many professions have this kind of structure. For example, if you are a visual effects worker for Pushing Daisies, and the next episode that has to be done in a week requires you to create a computer generated image city or field full of varied windmills, you need to be able to put in however many hours it takes to get the job done.
One of the dirty little secrets of the intense protections afford to workers in Europe, is that none of that applies to people at the very top of the economy: senior managers or business owners, and senior professionals, particularly in the private sector. They work far more hours with far less vacation than the most of their working class and middle class peers do and receive far greater rewards for their trouble. The class of what we would call "exempt workers" in the United States is thinner there than it is in the United States, but it still exists.
What Policy Changes Would Improve Societal Well-Being?
There are proposals to create more gender equality in the workforce.
The New York Times article mentions several: Universal pre-school programs, paid parental leave, a right to request a switch to a part-time or flexible schedule, and job sharing for jobs that require someone to be on call at all times. I noted another above, marginal income tax rates on earned income that are individual rather than household based, and entrepreneurial creation of firms that exploit this market failure to use available human capital resources to their fullest.
But, as the New York Times article observes: "this problem isn’t one that lends itself to a sweeping policy solution."
The forces at work are complex and interrelated. Tax law and divorce remedies, in addition to day care funding and the way that firms organized their workforces, are all impacted.
The Impact Of The Structure of Higher Education
Another force involved is the structure of higher education.
While taking time off to work or explore after high school before going to college is possible, our educational system and economy discourages marrying or having children before completing college, and with good reason. In our larger society, people who don't go to college immediately after high school are much more likely to never go to college, particularly if the delay is prolonged, and this is particularly true of prestigious selective colleges. Selective colleges aren't interested in taking on non-traditional students, and non-traditional students often aren't interested in engaging in the nationwide search of the best students right out of high school often do.
Also, higher education in the United States is based on a monastic business model. College is designed to be undertaken nearly full time, with little room for earning an income, by single people with minimal needs who can accept a very modest standard of living (e.g. living in a dorm room with one or more roommates that doesn't even have its own bathroom or kitchen, and eating institutional cafeteria food or a cheap diet of ramen and the like).
College students don't generally have the resources to support families while their are getting their educations. Rather than receiving financial support, unless family steps in to do so, college students with kids are expected to work full-time to support their families while taking classes part-time for more than four years, attend a college close to home, get family support for child care, and skimp on tuition. Retention for students who take this path isn't great.
But, there is no good developmental reason in subjects outside the languages and perhaps high level mathematics dependent subjects, to think that higher education has to be delivered to people in their late teens and early twenties to be beneficial. The anecdotal evidence of professors accounts about what it was like to teach G.I. Bill students after World War II suggests precisely the opposite. That college students who are a few years older and have lived life a little more, are more serious, more thoughtful, and in general, better college students.
While there are powerful developmental reasons for starting education in literacy and many of the other subjects that are in elementary education (and a few that are not in most American schools like foreign languages) very early, the same reasoning does not apply to higher education.
Continuous K-12 education, followed by four years of college, followed by graduate school in many cases, followed by a relatively low paying apprenticeship job for many PhDs and M.D.s before reaching a full fledged and decently paying career job is a pattern that worked well when college was restricted to upper middle class men who got married in their late twenties to upper middle class or middle class women were typically five years younger their their husbands and were considered good matches even if they didn't go to graduate school or even a four year college.
Also, back when the system was created, any kind of graduate education was far less common. Many college professors taught with master's degrees. Most people interested in careers in business did so directly after finishing an undergraduate degree and never came back. Journalism was a job often filled by high school graduates who were literate but not highly educated. Engineers rarely got graduate degrees. In most of the world, law was and still is an undergraduate degree.
Six to ten years as a full time college student followed by time effectively apprenticing to a new career was not part of the game plan and certainly was not designed with any thought to when it makes sense for women to become parents.
These days Chelsea Clinton and her husband Marc Mezvinsky, were far more typical of upper middle class lives. While they knew each other from high school, college provided them a long time to develop a relationship, both of them went on to spend many years developing careers as investment bankers, and they married at age 30, despite having spent many childless years in a serious relationship.
Our society tells young people who want success to get married and establish a career before getting married or having kids, subject only to biological clock considerations that push women to marry and/or have kids by the early 30s. They did.
But, does it really make sense to encourage this education and career pattern? Should we have a system that so severely penalizes having children in your early twenties?
Is It Really Better To Outsource Parenting?
The economic penalty for leaving the workforce also pushes both parents of many children to return to the workforce even when they have young children.
Should we have a system that has such strong incentives to return to work after having a child as quickly as one would after coming down with a bad case of strep throat? Should we have a system that so strongly encourages the outsourcing of child rearing at a young age?
The Case That Outsourcing Parenting Has Its Place
At some point, perhaps sooner than is customary in American life, it may be fine to outsource child rearing. For all their faults, the upper classes of Britain and early 20th century upper classes of the United States, seemed to have managed just fine with a system that routinely sent children off to boarding school for high school and sometimes earlier. Before that, adolescent boys of a certain class were sent off to someone else to be raised as squires, and adolescent girls of that class were sent off to be ladies in waiting. I'm biased in that regard. I was an exchange student for my junior year in high school, and being away from home at that age was worthwhile experience. The daughter of a friend of mine is doing something similar, and my wife also spent many multi-month time periods (mostly in the summer) away at camps or as an exchange student or working somewhere when she was in high school.
We may have reached a point where boarding schools make sense for more people again, after almost fading out of public consciousness.
For example, in a generation or so, as the current generation of farmers die and the industry becomes much more consolidated, the population of rural farm communities will have less and less population density, which means a longer and longer ride to an increasingly small day school. Small schools in rural areas are much more expensive per student than larger schools (more than twice the average cost per student) in communities that are often not terribly affluent themselves, and the costs will continue to mount as technology causes these rural farm communities to depopulate. Already, it is increasingly hard for rural communities to even put together a reduced size football team. When local rural high schools can't put together full strength basketball and volleyball teams, maybe boarding schools run as public schools or supported at least in part by school choice funds, will start to look like attractive alternatives.
Boarding schools can also provide stability, equitable treatment and a neutral Switzerland for children of divorced parents who live a long distance from each other and can't stop the cycle of using the children to get back at their ex-spouses, something that lawyers in domestic relations practices see often and which is often mutual.
Boarding schools can provide stability for children of single parents who have jobs that require a great deal of travel, or couples where both parents have those kinds of jobs (e.g. children who have parents who are both deployed members of the military, or have one parent who is in the military and another who is a traveling salesperson or consultant).
And, boarding schools may be a preferable alternative to a complete termination of parental rights for parents of older children, for whom adoption may not be a realistic option, and termination of parental rights followed by foster care may also be a bleak prospect that also makes it particularly hard to keep siblings together. The are lots of cases where a middle ground between continuing a bad situation where a parent is in charge of 100% of child rearing all the time, and one where a parent is completely removed from a child's life, might be desirable.
While orphanages weren't a great success, the foster care model that assumes that being in a family setting is essential has also not been a great success story. Most children whose parents have had their parents rights terminated are not truly orphans in the sense of not having living parents, and because termination of parental rights is such an extreme remedy that courts are reluctant to impose, children often have to spend damaging time in harmful family situations until it is clear that a threshold has been crossed. But, many parents are capable of being parents in at least a limited way, even if they temporarily can't handle being full fledged residential custodians.
Alternately, it may make sense in all of these situations to re-examine the idea of "boarding schools minus," where older children attend an ordinary school, but live in some kind of group housing with parental-like supervision when school is in session.
Outsourcing the Parenting of Young Children
But, toddlers are not high school students.
The benefits of programs like universal preschool programs and all year school years, seem to be predominantly for children who aren't learning how to become middle class adults at home, because their parents either have to work and leave them in inadequate care, or can't serve as models for middle class language and social skills and worldviews, because they don't have those privileges themselves. As Malcolm Gladwell notes in his book "Outliers," most of the achievement gap that widens during the time that children are in school happens due to lags that lower class kids experience on summer vacation that kids from higher socio-economic strata do not. Most of the studies of the benefits of pre-school likewise seem to focus on the benefits for children who are poor.
It isn't at all obvious that there is any benefit to having others raise your children if you are reasonable function and have a middle class life.
It is also not at all obvious that it is good for children that about 60% married women with children under 3 years old have jobs in the paid economy, rather than being able to spend time raising young children. After the children are done breast feeding, fathers could probably be the ones at home as well (although they almost never are), but the notion that it might be a good thing for society for young children to be predominately raised by one or both of their parents, or at least predominately by family, rather than daycare providers, certainly seems like one that deserves fair consideration.
I certainly don't agree with the school of thought that says that daycare is young child neglect. Nannies, nurses, extended families, and others have cared for young children for eons to varying degrees. In the Roman empire, the upper classes routinely handed almost all parenting over to a hired tutor and nurse and had only the most formal and distant relationships to their actual parents. Millions of American children have grown up in day care centers and later as latch key children without catastrophic ill effects. But, should we really have an economy that so strongly favors having young children raised mostly by someone other than a parent?
Putting aside for the moment precisely how one gets there, at some point, wouldn't it make sense to have a system where people got a basic education until they were fully physically mature, got married and had children, shared the job of being primary caretakers of their children both day and night at least while the children were young, and both parents got higher educations and worked far less the full time hours for many, many years, and ended up in the same place more or less on their career paths that they do now after working and apprenticing first full time before having children?
Our society pays a high price for assuming that most families with young children will have two parents working full time jobs to support them, despite the fact that in an earlier less economically productive age, one parent working a full time job in the market economy seemed to be enough to support families larger than the ones that are common today.
Is it any wonder that people are nostalgic and puzzled by the fact that we seem to be able need to work more despite supposedly being more productive as a result of technological advances?
All Work And No Play
Our society has compensated. Families still do try to both work and spend time at home with children when they aren't in school and parents aren't at work. But, the price for that has been a huge blow to civil society. As Robert Putnam and other social capital theorists have observed, our society has increasingly few resources to devote to any activity that requires showing up. People spend less time in civic organizations, less time volunteering for churches, less time doing work for political parties, less time doing anything but writing checks for organizations that they favor. They also have less time to devote to friends and to socialize with other adults. People are more isolated; confined to work and family. No, that isn't the whole story, but it is a trend.
Is it possible to have a productive economy and good life where jobs in the market economy do not so completely rule our lives and define our identities?
Finding A Better Way
It is clearly possible to have a society that is more balanced. France manages to soldier on with good quality universal health care, nearly free higher education, and an entire country that goes on vacation every summer. Yet, surely the French are not so much more clever than us.
But, there is also a fair case to be made that this is not something that individuals can do on their own. People in economic systems are rational actors. We respond to incentives. Individuals who buck those incentives pay dearly for their choices. Greater individual freedom to live a more sensible lifestyle is possible only through collective action, perhaps political action, perhaps collective private action, but certainly not the action of individuals trying to do it on their own. We can't live differently without making alternatives less costly.
The book "Graceful Simplicity: The Philosophy and Politics of the Alternative American Dream," by Jerome M. Segal made the same point. Our economy and society are simply ill designed to allow people to make a choice to work less and make less money, or two have a household with two adults working a little more than half-time at good professional jobs, rather than having one adult working more than full time and another as a homemaker or being under employed working part-time in a non-professional job.
Another difficulty is that each of the three theories for how we got to the state that we are in now set forth above: business inflexibility due to tradition, price discrimination, and genuine differences in productivity between workers who interrupt careers or work limited hours and those who do not, imply very different solutions, but are hard to distinguish as causes because they have the same result and may all contribute to some degree.
Identifying a problem and articulating a sense of what one would like to see instead does not make clear how to get from point A to point B in the absence of an understanding of the main causes of the problem.
And then, there is the difficulty of agreeing on an outcome that would make us happy if we could achieve it.
In the abstract, a great many people want both genuine gender equality in the workplace, and a world where young children can be raised by their parents to a greater extent, and more career flexibility for parents, and stable marriages. They want to have a world where higher education is the norm for all who can benefit from it, and where adults are highly skilled in economically valuable pursuits, and a world where people can start families before they are in their early thirties, and a world where people can have meaningful parts of their lives other than work and family.
