Gender and Pay

Pay discrimination concerns have recently generated a flurry of legislative activity. The new Congress quickly passed the Lilly Ledbetter Fair Pay Act, while the Paycheck Fairness Act awaits Senate consideration after House approval. Not everybody, however, is convinced of the need for such legisation, as a study commissioned by the Bush Administration’s Department of Labor (and released days before President Obama’s Inauguration) repeated the contention that pay differentials are primarily the result of gender-based differences in investments in human capital development — e.g., that women on average are more likely than men to choose careers that maximize flexibility in accommodating family caregiving responsibilities at the expense of employment hours and advancement.

But this reminded me of a remarkable study released last year that examined the wages of transgender people – individuals who change their gender, typically with hormone therapy and surgery – to learn more about the relationship between gender and workplace experience while holding human capital investments constant. The authors found that workers who transitioned from male to female (MTFs) experienced “significant losses in hourly earnings,” while those who transitioned from female to male (FTMs) experienced “no change in earnings or small positive increases in earnings from becoming men.”

More specifically, authors Kristen Schilt and Matthew Wiswall concluded “that while transgender people have the same human capital after their transitions, their workplace experiences often change radically. We estimate that average earnings for female-to-male transgender workers increase slightly following their gender transitions, while average earnings for male-to-female transgender workers fall by nearly 1/3. . . .These findings suggest that regardless of childhood gender socialization and prior human capital accumulation, becoming women for MTFs creates a workplace penalty that FTMs do not generally encounter when they become men. And, while MTFs may benefit from being men at work before their gender change, they cannot always take this gender advantage with them into womanhood. We view these findings as evidence that the gender gap in workplace outcomes does not entirely reflect omitted variables, such as unobserved human capital. Rather, the change in posttransition MTFs’ earnings suggests that the labor market is not gender neutral.”

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8 Responses

  1. JP says:

    I wonder if this study says more about discrimination against transgender persons than about gender discrimination.

    It seems plausible to me that MTFs are more easily identifiable as transgender than FTMs. (This is a guess; if there is evidence to the contrary, let me know.) If so, MTFs will experience transgender discrimination at a much higher rate than FTMs, and accordingly will be paid less.

  2. Helen Norton says:

    That’s possible. For what it’s worth, the authors considered that possibility too (starting on p. 39 of the study) — but declined to exclude gender discrimination per se as explaining the pay gap. Here’s the conclusion of that section:

    “Some of the adverse employment outcomes for MTFs which we document above may be attributable to their changed appearance rather than to their changed gender. However, we argue that gender is still likely a leading cause of the before and after differences we document for transgender workers. Ethnographic research suggests that men express concern about their MTF colleague’s work abilities as women, not because of their appearance (Schilt and Connell 2007). Demonstrating this anxiety, one MTF who had co-owned a business with two other men was asked, post-transition, if she was still going to be able to run a company if she was always ‘thinking about nail polish” (Schilt and Connell 2007:606).'”

  3. Jack Leland says:

    men express concern about their MTF colleague’s work abilities as women, not because of their appearance (Schilt and Connell 2007). Demonstrating this anxiety, one MTF who had co-owned a business with two other men was asked, post-transition, if she was still going to be able to run a company if she was always ‘thinking about nail polish

    This still seems like bias against the choice to change sex, not sexual characteristics per se. I can imagine any number of men who would say that to a trans-gendered MTF but not an actual woman, because the disrespect flows from the perceived value of the choice (“What kind of man would choose this? One unworthy of respect.”). In other words, the attitude is, “Oh, you want to be a ‘woman’? I’ll treat you like a ‘woman’.” Actual women do not receive such treatment, because they aren’t men who have chosen to have sex change operations.

  4. JP says:

    Jack’s comment seems plausible. Along similar lines, I would note that it is much more socially acceptable for a female to “act masculine” than for a male to “act feminine.” I would entirely expect those social attitudes to carry over into disparate views of MTFs and FTMs.

    I certainly wouldn’t “exclude gender discrimination per se as explaining the pay gap.” I just don’t think the study says much about gender discrimination either way.

  5. Helen Norton says:

    Saying that “I’ll treat you like a ‘woman,'” only to then treat that person in a stereotypical and denigrating way (i.e., suggesting that nail polish will distract her from job responsibilities) seems a pretty good example of gender discrimination.

  6. TRE says:

    This is a crazy way to do a study. Transgendered individuals are hardly typical examples of their gender. Whatever outcomes transgendered people experience due to the transition would require extensive further study to extrapolate to everyone else. It isn’t like they are just changing an M to an F in a database for random workers somewhere.

  7. Jack Leland says:

    Saying that “I’ll treat you like a ‘woman,'” only to then treat that person in a stereotypical and denigrating way (i.e., suggesting that nail polish will distract her from job responsibilities) seems a pretty good example of gender discrimination.

    It may be “gender” discrimination (whatever that means), but it isn’t sex discrimination. It isn’t discrimination against women, and one need not be a sexist (or a homophobe) to treat a MTF transsexual that way.

  8. Mike says:

    Transgender males to female will see their salaries drop . . while their expenses get higher.

    The same employers who pay lower salaries to female employees have not coordinated with banks, lenders, landlords, insurance companies, grocers, car dealers and the like.

    …who one and all charge the same price for services and products (and in many cases more)to those lower paid women customers forcing them into indentured lives.