Why do women earn less than men? Women earn less than men. For example, in 1988 the hourly wages of women in the U.S. were 16% less than those of men. The gap between male and female incomes varies with age. The gap between the labor incomes of young women and young men is much smaller than that between middle-aged women and men. It is also clear that jobs in which women are concentrated pay less. The larger the number of workers in an industry who are women, the lower the average wages. Why do women earn less than men? Are the differences explained by the fact that women are looked down upon? If so, the government has to intervene, to force the employers to pay equal wages to equal jobs. however, there is no agreement among economists about the causes of the gap. One view argues that women on the average have chosen low-paying jobs in which workers enjoy the freedom of entering and leaving the labor force, which reduces their years of experience relative to men. Other people say the gap can also be explained by the difference in educational background which is shown in the difference in the marginal product between men and women. Much of the gap, however, has not been fully explained. It might be the result of some bias against women. It is this part that has produced calls for government action. What would happen if the government did intervene to increase the wages paid to women? One possibility is that incomes for women as a group might actually decline. An increase in wage decreases the quantity of labor input demanded, resulting in decreased employment as the rate of hiring new workers declines. The result will be a surplus of labor. Those who can find jobs might be better off while those who had jobs might find themselves out of work. What would happen if women's wages were raised?
Input of capital would be increased. The unemployment rate would go up. Those that have jobs would become better off. Women as a group would earn more than before.