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2V06 Tuesday November 27th LECTURE.docx

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McMaster University
Tu Budros

th LECTURE Tuesday November 27 NET GENDER GAP Almost always, men have higher promotion rates than women but this may be due (a) to gender discrimination or (b) to men’s greater qualifications. So… Gender Human Capital (Qualifications): Example: Education, experience, special training  Promotions More Controls: Example: Marital status, child-bearing age If men’s promotional advantage over women is attributable to their human capital, then controlling for – taking into account – these factors should eliminate the relationship between gender and promotions: Men and women should have the same promotion rates. Then the conclusion is that no gender discrimination exists: The initial relationship occurred because of men’s human capital advantage. Once human capital is controlled, this relationship disappears.  What really matters is that men have higher human capital. But there is a caveat: Discrimination may be embedded in human capital factors: Example: Employers may make it easier for men than for women to obtain extra education, to take in-house training courses. Anyway, gender almost always affects promotions, with controls in place.  If a man asks for extra education, businesses will give it to them, they are given opportunities to do so  When women ask for extra education, businesses tend to deny them it, leading to discrimination Although this is the case, it is possible that relevant human capital or other factors are missing from the model and that if they were included, the gender-promotion link would disappear: Gender discrimination is not present. The Gender Interaction theory focuses on each individual gender; just on women, then just on men. This gets at the issue of discrimination in more direct ways. This produces more direct evidence of gender discrimination: 1. Calculate the promotional payoffs or returns for men vs. women for increases in human capital. If the promotional payoffs are identical, then there is no gender discrimination. If the payoffs are greater among men than among women, then there is discrimination. What happens to men when they go back to school? What are the returns for them in terms of their promotion rates? If the returns are the same between men and women, there is no discrimination. Both men and women go back to school and then come back and have higher chances at promotion. But the reality is that it almost never works out that way. Men go back to school and get an MBA, his promotion rate increases by 5%. If a woman goes back to school to get an MBA, her promotion rate only increases by 1%. There is no explanation for this besides discrimination. 2. Assign women the higher average human capital scores for men and compute their promotion rates. If the promotion rates are the same as men’s, then there is no gender discrimination. If women’s promotion rates remain lower than men’s, then there is discrimination. Men’s promotion rates are always higher than that of women’s. There is no explanation for this other than discrimination. The Literature Government Sector: Promotion Differences by Gender One study on a U.S. government agency has reported higher promotion rates among women, perhaps due to state government pressures to address past discrimination against women. Private Sector: No Promotion Differences by Gender The literature has focused on the private sector. Three case studies report no gender differences in promotions, but discrimination may be present in these studies. Example: Dencker A U.S. manufacturer. Women had promotional advantages during restructurings due to gender equity pressures from legal agencies, the government, and regulatory bodies. When these bodies were removed, the advantages quickly disappeared. Women were only being well promoted because other external bodies were keeping a really close eye on them. Spilerman & Peterson U.S. insurer. Women, blacks, and Hispanics have
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