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The Gender Wage Gap and the Fair Calculations Act

31 Pages Posted: 24 Oct 2017  

William E. Even

Miami University; IZA Institute of Labor Economics

David A. MacPherson

Trinity University; IZA Institute of Labor Economics

Date Written: September 2017

Abstract

If enacted as a law, the Fair Calculations Act would require forensic economists to ignore an injured party’s gender when forecasting the loss in future earnings. We discuss how this would affect the size of awards for men and women, and some of the issues that would arise if the law is enacted. Of particular interest is the extent to which gender-differences in earnings, earnings growth, and work-life expectancy are the result of sex-discrimination in labor markets as opposed to sex-differences in preferences. We present evidence that gender differences in human capital characteristics explain a large share of gender differences in in labor market outcomes, there is considerable disagreement about how to interpret the results. We also show that gender differences are diminishing over time, but it is not likely that the gap will disappear in the near future. Finally, we discuss how forensic economists may have to rely on additional information when forecasting earnings if they are no longer allowed to use gender.

Keywords: gender wage gap, discrimination, work-life expectancy, wage growth, forensic economics

JEL Classification: J30, J31, J70, J71, J78, K13

Suggested Citation

Even, William E. and MacPherson, David A., The Gender Wage Gap and the Fair Calculations Act (September 2017). Available at SSRN: https://ssrn.com/abstract=3057501

William Even

Miami University ( email )

208 Laws Hall
Oxford, OH 45056
United States
513-529-2865 (Phone)
513-529-6992 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

David MacPherson (Contact Author)

Trinity University ( email )

San Antonio, TX 78212
United States
210-999-8112 (Phone)
210-999-7255 (Fax)

HOME PAGE: http://www.davemacpherson.com

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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