Gender-Based Pay Gaps: Methodological and Policy Issues in University Salary Studies

Methodology is often a point of contention in gender-based salary studies. Although this debate seems at first to be merely about technical issues, it also has an important conceptual dimension. We argue that there are two competing implicit conceptions of discrimination, one institutional and the other individual, that underlie many such debates. We first contrast the preferred methodologies advanced by each side, the policy capturing approach and the flagging approach, and explore the theoretical meaning of their statistical models. We then describe a practical application of both methodological approaches in one specific salary inequity study. In conclusion, we reflect on the implications of such practical statistical choices, discuss how such models can be combined, and make suggestions for sociologists who act as statistical experts or work with them in gender-based salary inequity studies on their own campuses. Over 100 studies have evaluated possible gender-based discrimination in salaries at academic institutions in the United States (Gray 1990; Haignere et al. 1996; Scott 1977). There are generally two opposing sides interested in these discrimination studies, a faculty committee or union representing employees that believes gender-based discrimination exists, and an administration team that often believes none exists. A central issue for both sides involves the choice of method for determining the existence of a possible gender-based pay dif7 The authors appreciate the considerable help provided by participants as well as reviewers of the article in various forms. In particular; we thank Nancy Day Adams, Mark Abrahamson, Nancy Breen, Christine Bose, Leslie Cutler, Paula England, Gloria A. Gronowicz, Mary Casey Jacob, Timothy Killeen, Larry Pittman, Natalie Sokoloff, Wendy Soneson, Carole Turbin, Wayne Villemez, Dena Wallerson, and Sue Williams, as well as the entire Working Group on the Status of Women Faculty and the Joint Dental and Medical Councils Committee on Women’s Pay Equity. We appreciate the willingness of all the participants in this study to be rigorously reflective and to share this process with others in the interest of improving gender equity at other institutions as well. However; the interpretations and views expressed in this article are those of the authors alone and do not represent those of the administration or the committee. Corresponding author — Myra Marx Ferree, Department of Sociology U-68, University of Connecticut, Storrs, CT 06269-2068; email: ferree@uconnvm.uconn. edu 8 M. M. Fe r r e e & J . McQu i l l a n i n Ge n d e r & So c i e t y 12 (1998) ferential (summarized in Gray 1990). In this article, we argue that these methodological debates have an important conceptual dimension. To illustrate our case, we draw on a salary study that was conducted at a state university medical and dental school. This salary study, like many nationwide, came into being as a result of discussions between faculty and administration. The school’s vice president established a formal committee of women faculty and charged them with ascertaining if gender-based inequality in pay existed at this institution. Both faculty and administration agreed from the start that the issue was inequity, or discrimination in the broad sense, whether or not it was actually illegal. The goals endorsed by both faculty and administration were to discover if there was a problem in setting pay, whether conscious or unconscious, and if so, to remedy it. Later, disagreement arose between this committee and the administration over several specific aspects of the study, particularly the most appropriate methodological approach for identifying the existence and nature of any such problem. We suggest that one underlying tension was between competing, largely implicit understandings of how pay inequities arise and consequently how research should be appropriately designed to evaluate them. We refer to the two approaches as “institutional” and “individual. ” The committee assumed a model of salary inequity that operates at the institutional level. The institutional approach conceptualizes wage discrimination as a gender stratification process that is not only historical but also pervasive and ongoing (Acker 1989; Clayton and Crosby 1992; Connell 1987). As a theory, the institutional approach assumes that salary setting processes for men incumbents are the institutional norm, women having historically been excluded from the system and thus being “added in” after the fact. Paying women less in the same jobs was completely legal until only 30 years ago; when women were hired in conventionally men’s occupations, their wages as a class were systematically lower. The acceptability of paying women less remains an implicit social norm. Moreover, the institutional model sees all specific salary-paying organizations as being part of a labor market that as a whole still discriminates against women, leaving women in a less strong market position than men when negotiating salary with their organization, which can then benefit by continuing to pay women less. An institutional model assumes that no individual prejudice or hostility by a supervisor to an individual woman employee is necessary to pay her less, systematically, than a similarly skilled and experienced man in a comparable job (Deaux and Major 1987). Institutional inequity is often hard to see in everyday interactions. When something is institutionalized, it becomes part of the shared expectations about who deserves what and who should be responsible for specific positions. These shared expectations are eventually built into established patterns of behavior; in other words, they become institutionalized as simply the way things are done (Benokraitis and Feagin 1995). No conspiracy or policy to pay women less is necessary. Identifying inequities at the institutional level requires understanding the salary setting process as it is applied to men in the organization as a whole and establishing if, when, and how women’s salaries as a group are Me t h o d o l o g i c a l a n d Po l i c y is s u e s i n un i v e r s i t y sa l a r y st u d i e s 9 systematically set differently. Addressing institutionalized inequity involves taking proactive steps to change institutional culture and functioning. The administration appeared to us to assume a model of inequity that operates at the individual level. This approach conceptualizes discrimination as the result of isolated prejudiced individuals in positions to decide salaries who deliberately choose to pay individual women less than they abstractly merit. In the vice president’s own words, he wanted to know, “Did I have a bad actor here? And if so, I wanted to get that person out of a leadership role. ” In this conceptual schema, some percentage of the income the individual woman has earned is being arbitrarily withheld “just because she is a woman” by an individually prejudiced administrator or supervisor, the “bad actor” in the above quote. To model what an individual woman “really earned” while “removing” her individual gender, this approach seeks to identify either an individual man or a group of men who are as close as possible to doing exactly what she does in as similar a setting as can be determined. Once the comparable man or men can be found, a “true” value of her earnings can be estimated and the extent of her underpayment, if any, measured. In general, the individual model assumes that such discrimination would be rare rather than systematic, being a reflection of individual prejudice (the “bad actor”) rather than of institutional functioning. The individual approach also reflects the managerial demands on administrators. As managers, higher-level administrators can more readily identify and sanction “bad judgment” by individual lower-level decision makers than address the impact of widespread practices within the institution. Smaller, more internally homogeneous groups are also more comprehensible, and literally more “manageable” to administrators who have oversight over large, complex educational institutions. For those administrators who think of prejudice-anddiscrimination as a single phenomenon and are thus committed to an individual model at the conceptual level, to apply the institutional approach seems to suggest that they believe all of their subordinates are sexist. To them, the across-the-board remedy that the institutional model offers may seem like a “bad performance review” applied indiscriminately rather than to specific “bad actors. ” As managers, they want to control decision making over issues like salary and to apportion rewards (raises) and blame (for biased decisions) selectively. They also have incentives to keep the cost of any potential salary settlement as low as possible. There have long been debates between these two models at the conceptual level (see, e.g., Gray 1993). Institutionalists argue for the importance of understanding sexism (and racism) in defining job queues for occupations (Reskin and Roos 1990), structuring patterns of power and influence in corporations (Cockburn 1991 ; Kanter 1977), and systematically influencing the wages and salaries thought to be appropriate for specific jobs and classes of workers (Acker 1989; Bielby and Baron 1986; Jacobs and Steinberg 1990). Defenders of letting market forces alone determine salaries see discrimination merely as an “imperfection” reflecting individuals who are prejudiced, and argue instead that most or all systematic differences reflect real differences in market value 10 M. M. Fe r r e e & J . McQu i l l a n i n Ge n d e r & So c i e t y 12 (1998) between individuals’ human capital, productivity, or occupational supply and demand (e.g., Becker 1985; Filer 1983; Polachek 1985). Neoclassical economists often believe strongly that markets do eliminate discrimination in all but rare instances and are theoretically committed to the individual model.