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Rhoda Pierce-Brown: Rhoda Pierce-Brown is a Senior Lecturer in Accounting and Finance at De Montfort University, Leicester, UK
Introduction
Both UK and US studies of economy wide wage differentials have consistently identified a 20-30 per cent male-female wage gap. Despite ever increasing numbers of women in the workforce, the positions occupied by women are concentrated at the bottom of organisational hierarchies. The tendency is for women to choose, or for employers to allocate to them, lower paid, lower status roles than male employees (see Jackson and Hirsh; 1991, Lepine, 1992; Wentling, 1992). Explanations offered for this effect frequently centre upon employer discrimination on the basis of real, or perceived, lower productivity in female workers (Martin and Roberts, 1984; Vella 1994; Zabalza and Arrufat, 1985).
Two distinct approaches to the analysis of the problem have evolved in the economics literature. The first approach, based upon human capital theory, lays its emphasis upon the lifetime voluntary choices of participants in the workforce as determinants of occupational and remunerative differences. Early human capital theorists (Becker, 1975) forwarded the explanation that over their working life women are, on average, less productive than men, since they tend to take breaks from employed work for the purposes of maternity leave and child-care and also that they bear more of the responsibility for unremunerated domestic work. The second approach, which may be classified as theories of labour market discrimination, explains salary differentials in terms of unequal treatment meted out to individuals who have equivalent occupational but differing personal characteristics (see Bergmann 1974 and 1989; Coutts and Roberts 1995; England, 1984). One problem of empirical research is, therefore, to separate "economically justifiable" wage differentiation on the grounds of productivity, from that which arises due to prejudice and the employer's inability to distinguish between more or less career oriented women.
The analysis employed in this paper is an original application of existing human capital theory, which seeks to combine the two distinct approaches to the problem. Economists of the neo-classical school employed the original human capital models, in this context, as an "economic" justification for wage discrimination. Under the assumptions of classical rationality, gender discrimination was thus attributed to the law of the market and not to personal or social prejudice (Becker, 1975, 1993;...