The Attainment of Pay Equity Between the Sexes by Legal Means: An Economic Analysis

The purpose of this Article is to present an analysis of the gap between men’s and women’s wages with particular emphasis on the likely effects of various existing and proposed legal remedies. Part I sets out a simple “ideal” statistical model of wage determination. Its purpose is to identify carefully the potential impact of alternative legal remedies such as the Equal Pay Act, Title VII, and proposed policies like comparable worth. This model is ideal in the sense that, although it could be estimated in principle, there is no data set currently available with which it could actually be estimated. Part II explores the impact of these various legal remedies on individual organizations, because each existing or proposed remedy would be implemented on an organization- by-organization basis rather than on an economy wide basis. Part III addresses the empirical dimensions of the problem raised by the comparable worth movement-the average wage disparity between “men’s jobs” and “women’s jobs.” We initially offer a range of estimates of the potential impact of comparable worth on the average male-female wage gap in the United States based on the assumption that there would be no secondary effects on employment, relative prices, and other wage levels. This assumption is lifted in Part IV, which discusses the adjustments that organizations affected by comparable worth or other laws would make in their employment of different types of labor, the associated wage rates, and their product prices. Consideration of these secondary effects implies that legal interventions designed to improve the relative labor market status of women might have very different effects from those expected under the zero-adjustment assumption of Part III.