Women overinvesting in education? Evidence from the medical profession (2012)
journals.uchicago.edu
journals.uchicago.edu
Regarding the gender angle, I'm reminded that the income gap is really between husbands and wives. Unmarried, childless women earn significantly more than unmarried, childless men on average. The primary issue revolves around which parent leaves a career to stay home with children. Career gaps are extremely costly.
If you factor in opportunity cost and lost wages for school years along with compound interest then most degrees will never generate a positive ROI. On average, degrees barely break even with their cost, but some degrees are far more lucrative than others -- meaning other degrees are far below breakeven ROI.
Taking a mid-career break makes it massively harder to overcome the costs related to obtaining a degree. This would be true for either men or women.
Do you have a source?
Because of a ton of confounding factors, how you are calculating opportunity cost, and a lack of what specific degrees you are eliminating from the calculation because they are high return fields it is not easy to confirm or negate your statement.
Average estimated increase in earnings: 1.2m - https://cew.georgetown.edu/cew-reports/collegepayoff2021/
Average total cost of a 4 year degree: $140k - https://educationdata.org/average-cost-of-college
Average income of a 20 year old over 4 years: $144k (BLS, $36k/yr)
So you're looking at $300k lost from 18-22 for both expenses and wages. (loans generally increase this cost even more)
Assume 42 years average career duration before retirement (64 - 22)
Assume a 5% compounded rate of return.
The 300k will become $2.3 million, vs $1.2 million derived from median wage increases.
You can play around with these numbers, of course. Very rough. I didn't look at taxes, I didn't account for college-capable kids having above average earning capabilities, I didn't include increased costs from financing with loans, etc. I'm assuming full-time students who would otherwise be earning full-time income.
This isn't eliminating any degrees, this is an all-inclusive average. But, we do know that different degrees have radically different earnings profiles -- and from there you can pretty easily estimate how much better or worse off you'll be vs the average case illustrated above. Deviating from the average is zero-sum. Some degrees might beat the average several times over -- but conversely some degrees will underperform by similar ratios.
1. You are assuming 0 income for the college track person, which is not the case for many, and was not for me. In my case, the "opportunity cost" was largely time spent on work/education (minus the difference in part v. full time and being on a career track), as opposed to leisure. But even without sacrificing leisure, many students work for 2-3 months a year during summer break.
2. You are assuming that a portion of that income will actually go to compounded return, this is not the case, most of that is eaten up by living costs at the lower wage.
They are not saving at high rates getting compounded returns (lazy first google result) https://www.cnbc.com/2017/09/14/how-much-money-the-average-m...
All I can say is that anecdotally, in my cohort, my peers/friends that got a degree are doing significantly better than those who do not. And that is why I mentioned confounding factors. It is likely many of those peers would not have done as well, but it is hard to work the numbers on that without going really deep.
"All I can say is that anecdotally, in my cohort, my peers/friends that got a degree are doing significantly better than those who do not."
This is a bit of a different argument, but the relevant cohort to compare are the people who qualified to attend college, but did not. College admissions act as a powerful filter. People who could attend college generally do as well as people who do attend, and have very different earning potentials compared to people who were not able to qualify for admission at all.
But there are complications in every statement for example:
>People who could attend college generally do as well as people who do attend, and have very different earning potentials
In this case you have the hidden factor that a student could have and chose not to. Why did they make that choice?
It may have been the cost of college, or maybe even more likely it could have been an opportunity at a family business. So then you have to correct for that factor, because the people who chose to go, perhaps did not have that family business to join. Many of those people who did not go but could have, may have had a much clearer path to earning power than the random person.
I guess my point is that this is all very complicated without really in depth study, back of the napkin stuff only goes so far.
Got a cite for this assertion?
But there's one demographic where women outearn men: people who are single, childless, and between the ages of 22 and 30.
Within that universe, U.S. women earn 8 percent more than men, on average, according to a new report from the research firm Reach Advisors.
Women in this group out-earn men by an even larger margin in some metro areas -- 17 percent in New York, 11 percent in San Francisco, and a high of 21 percent in Atlanta, to name a few.https://www.pewresearch.org/fact-tank/2022/03/28/young-women...
Results shake out more equal because it just compared young women to young men, not adding the childless and unmarried restrictions.
The nonwage job utility hypothesis is one that is typically completely ignored when discussing wage gaps. I'm not sure what proportion of which wage gaps are explained by this - and with how politically charge the topic is, I doubt there will ever be a confident consensus range. Intuitively, most people have some extent to which they're more willing to work a more prestigious, less difficult, less time-consuming, more fulfilling, etc job even if it pays worse. It's a lot easier to measure wages, though, which makes them a particularly tempting fixation.
An MD is just a really shortsighted decision for many women who would like to have and spend time with multiple kids. If you're hitting all wickets in ideal timing (assuming HS grad at 18), you could finish med school at 26, then residency sometime around 30, which is already feeling quite late to have your first child. And the residencies I hear about don't sound like great environments for a healthy pregnancy, so maybe make conception at 30, baby probably at 31. And now you have loans to pay off and high earning potential, just as you're wanting to spend time with young children. As this is only baby #1. And hopefully these women already have husbands lined up, despite that being a significant difficulty for woman doctors.
It gets much worse when you talk to women who, for various reasons, are still applying and hoping to get in at age 25 or 26. And then I've heard 20-something men talk about applying for medical school in the same conversation where they ask coworkers about part time work schedules and allude to wanting not to work very much; it's like their perceptions of life have a single scalar parameter of success, years of medical education, and they can't see all the stuff off the sides of that grind of a narrow track.
The important part is here. The wage gap isn't because of discrimination or sexism like certain parties or factions claim. The wage gap is mostly a working gap. But that doesn't grab the headlines. Mass media would rather misinform and outright lie to the public. That's sadly the result of turning news into a profit-making private enterprise rather than a public good.
For example, your assertion that the 80% gap “better informs” makes no sense without some context you didn’t share. As a random fact it’s no better or worse than any other, but it doesn’t explain anything. The 96% points to what likely represents a real (but small) ethical issue that needs corrected, it’s also a more precise and accurate statement that I’d say better informs.
Neither number says anything about a glass ceiling, and using them to argue about a glass ceiling just undermines credibility.
The returns from the money spent on education are not present if the time spent in the field is low (through either low hours or leaving the field).
Ex - Nearly 40% of female physicians are either part time or no longer in the field at all after just 6 years. And that's literally data coming from the AAMC (https://www.aamc.org/news-insights/why-women-leave-medicine).
22.6% of female physicians are part time after 6 years, compared to just 3.6% of male physicians.
That's your gender gap...
Further - the obvious cause is staring everyone in the face... children. Women are still disproportionately considered the primary caregivers for children. If you want to remove the gender gap... make it more compelling for men to stay at home and take care of their kids.
Personally - I think this will be a fairly challenging task, because I happen to see childcare as a very rewarding occupation (at least when they're your own children, especially below the age of ~12), which makes it obvious why women presented with the opportunity to stay at home take it.
But that reward is not financial.
Are there any societies out there that could not accept the inequality in earnings and successfully figured out a solution that felt both liberal and fair? It feels like you just can't get an egalitarian utopia without the government setting hard limits on how much or how little each person can work.
Seems like getting 100% parity would be mostly unsolvable, given human nature, unless we were to replace those workers with computers.
1. Free childcare (we've already gone a long way here with the public school system, which at the end of the day mainly boils down to childcare in many parts of the US)
2. Family stipends during FMLA leave for childbirth.
Number 2 in particular is required because social norms are still absolutely geared towards expecting new fathers to take considerably less time off to ensure a paycheck is coming in.
This sets a rhythm that is hard to adjust later - the father does not spend as much bonding time with young children. Housework falls to the mother because she is no longer working. Once the mother is recovered the patterns are already established, and the conversation about cost of childcare vs the mother's salary begins on a biased foot.
I'd actually much prefer being a full time stay at home dad, but holy fucking hell is the stigma running strong there across our society at large.
But what changes does it bring to the socium? For children, spending time mostly in a nursery while both parents work hard vs with mother (or both parents) is very different.
I got SO much fucking flak for it from family/friends/co-workers. Especially the older crowd (45+).
The deal on paper is often not the deal you're expected to take. Opting out of a career in favor of childcare is considered a privilege reserved for woman in many circles.
I'd happily be a full time stay at home dad - but I make 3x what my wife does because I went into software and she works for a non-profit. So currently we balance both full time jobs and pay for daycare. But that starts to make less sense if we have kiddo number 2 or 3 - because then daycare costs begin to eclipse her salary.
The problem is that 5 to 8 years from now - all the kids can attend public school, and we'll likely both want to work full time at that point regardless of what we do now, but the person taking the gap will likely end up making less (they will be 5 to 8 years less senior & experienced).
Let’s take a look what NPR thinks about gender pay gap:
https://www.npr.org/2022/03/16/1086732450/on-equal-pay-day-w...
Are they clear that the gap is mostly about number of hours actually worked in a year, and difference in gender distribution across occupation? No, these are only alluded to in passing, if mentioned at all. In fact, this nonprofit venue’s messaging on the topic is the exactly the same as the one you can find in for-profit venues.
Profit motive as explanatory factor for why media misinforms people is greatly overstated.
* Women get paid $9/hr. less than men with the same level of experience (wage gap) * Women work 11 fewer hours per week than men (working gap)
.. and the paper claims it's the second factor that is the primary cause of the earnings gap.
There's nothing there that either confirms nor refutes discrimination/sexism. Interestingly the paper states:
In our data, both the median male and median female doctor work at least 40 hours per week in every experience bin. Despite both being “full-time,” men and women nonetheless work substantially different numbers of hours in our data. The commonly used methodology of estimating earnings equations with no controls for hours worked (apart from restricting the sample to FTFY workers) would conclude that men’s wages are much higher relative to women’s wages than they actually are.
In other words, the authors are saying that a naive analysis would support the (in their estimation) incorrect conclusion that the earnings gap is purely a wage gap. If that's true, and their paper takes a new step forward in disambiguating these factors, then it would be unfair to paint the previously held received wisdom as deliberate misinformation and lies.
If the effect is largely not because of discrimination, and discrimination is far more often stated as the cause, I know who I'd be calling dishonest here.
This goes double for anything directed at the public, since a short soundbite is all you get.
The "wage gap" has never been attributed, by any study, soley to the impacts of discrimination for equal work – though some effect is seen. For instance, the 2009 Bertrand showed that there was a 10% gap between new business school graduates, based on gender [0]. That difference never really disappears, on average, across the population [3].
However, the effect definitively widens at child birth, with women shouldering an unequal amount of caregiving responsibilities [1]. Whether married or unmarried, women with children take a hit. However, when married, even with children, men don't take a hit. Married men generally earn more than unmarried men. In fact, they generally earn more than everyone else – though this effect is shrinking. [2] Unmarried women, without children, will generally earn 90% of an unmarried, child-less male assuming equal education levels. We see a growing disparity, with unmarried, childless women overtaking unmarried, childless men in earnings due to the education gap. Eliminate educational differences, and the gap reappears.
When either side collapses the "wage gap" down to simplistic tropes like individualized gender-specific discrimination or "choices", they're generally signaling they haven't studied the topic beyond reading a few headlines.
It's way more complicated, and interesting.
[0]: https://scholar.harvard.edu/files/goldin/files/dynamics_of_t...
[1]: https://www.henrikkleven.com/uploads/3/7/3/1/37310663/kleven...
[2]: https://research.stlouisfed.org/publications/economic-synops...
This is a a loaded phrasing, though. You could just as well say that men shoulder an unequal amount of wage earning responsibilities. Men with children take a hit in the amount of time and energy they are expected to spend making money.
Gender roles and social expectations are what's driving this, but the common framing is all too often men using their agency to force women into theirs, without allowing for the possibility that women are using their agency to do the same.
You could say that, but I think most people would raise their eyebrow at you.
When given a choice, many women do chose to work more hours.
Even if a wage gap exists, it doesn't automatically follow that it's discriminatory. Example: Women work less hours/take longer time off --> less job skills on average --> less promotions on average --> wage gap.
It also makes assumptions (i.e. that a PA would work med-school / residency-level hours during those age ranges) that feel like they're overly likely to produce the result they were hunting for.
The broader point that women on the whole tend to work fewer hours and have a wage gap later in their careers still holds, as does this mean that on average the pain of a grueling professional degree is less rewarded for women.
This article feels like it was hunting for a conclusion and played a few tricks to get there, more than anything.
"Women Are Overinvesting in Education for the Monetary Returns."
If the other side of the ratio is suppressed, then it would be more accurate to write:
"Women are underpaid in monetary returns for their education."
This is the reason for maternity pay. This is the reason continuing education and flexible hours have to be mandated. Leave it to the market and all your doctors† will be manly mannish men with no experience of family care. This is so obviously undesirable, it's worth intervention.
† Not limited to doctors. Expand this to any profession that favours unbroken employment and undervalues the experience of raising a family.
Though it's just wishful thinking to think your or my scenarios are straightforward to price.