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| Author: | Amity Shlaes, Senior Fellow for Economic History |
|---|
August 25, 2009
Bloomberg
The pay gap between women and men is again in the news. Run the numbers from a July 1 report of White House salaries and you'll find that the average female staffer in the White House earns $9,168 less than a male.
This gap is a tad embarrassing for President Barack Obama and his progressive Democratic Party, which tends to argue it is nurture, and not nature, that causes such disparities. After all, Obama campaigned on a promise to help women by doing all that is politically possible to make their status equal to that of men. Hiring should be the easy part.
The West Wing gap suggests that cultural prejudices are so deeply ingrained that even the Obama team can't suppress them. Isn't it always that the hottest jobs--White House or hedge fund--go to men even when the women deserve them?
But maybe the White House didn't fail. Or maybe it should have done its personnel selection differently, with a ruler to measure the fourth digit of job candidates' hands.
That at least would be the conclusion to draw from a study published this week by Paola Sapienza of Northwestern University and Luigi Zingales of the University of Chicago. Attentive readers will note I've cited this pair before. To me they are doing the most interesting work in academic economics.
Their latest finding: high-testosterone job candidates tend to seek out riskier, higher return work, while those with lower levels gravitate toward stabler, lower profile, lower-return employment.
Volvos, Race-Cars
To arrive at this determination Sapienza and Zingales noted holders of Masters in Business Administration degrees take jobs with a range of risk. There are Volvo jobs -- stable, reliable, but unsexy. And there are race-car jobs -- jobs in finance, which pay 2.8 times more.
These race-car jobs can also wipe out and deliver distinctly poor pay. The standard deviation in salaries in the finance field is two times as large as in the other positions.
Then Sapienza and Zingales asked 500 MBA students to play games that reveal their willingness to take risks. Next, they sought to capture students' lifetime exposure to testosterone, a hormone that appears in both sexes, although normally in greater concentration in men. The professors determined subjects' hormone levels through saliva tests and by measures that indicated the rate of exposure to testosterone that the subject experienced in utero.
These included the now-famous digit measure in which the fourth finger of both males and females exposed to more testosterone in the womb tends to be longer than the second, or index finger. Finally, after the students graduated, the professors rated their jobs for riskiness.
Hunger for Risk
Some of the Sapienza-Zingales findings weren't surprising, especially given other such work in the past. The higher testosterone subjects were less risk averse on tests and also landed the riskier jobs. Such data are what motivate Democrats to endorse anti-pay gap legislation.
What was interesting though was that it wasn't the subjects' gender, per se, that was relevant. It was testosterone.
In men, variations in levels of testosterone mattered, but less than in women. AND what we might call High-Test women, or females whose testosterone exposure was elevated relative to other females, were as likely as males to go for, and get, those race-car finance jobs.
When it came to determining whether a female student would go into the finance field, it appeared to matter more whether a woman was being exposed to testosterone now (the saliva test) than whether she had been exposed to testosterone in utero (the finger test).
Nurture Matters
This suggests a couple things. The first is that nurture may indeed matter, just as Democrats argue. The fact that men's choices seemed less sensitive to testosterone exposure suggests that their identity as males, which their cultural and personal experience helps to shape, may have been a factor.
The second is that nature matters too and the finding that the timing of testosterone exposure, in addition to the level, can influence career choices.
Some might argue that comparing MBA jobs with White House jobs is a stretch. But the positions are similar in the scale of their rewards. MBA jobs pay maximum in dollar currency. The words "White House" on the resume are worth millions in another currency, the currency of politics, which is eventually redeemable in old-fashioned dollars.
Former President Bill Clinton, whose second and fourth fingers look to the casual eye to be about the same length, has demonstrated that through speaking fees.
Boosting Pay
What's the takeaway? There are the flippant ones: Women who long for high-test jobs might do better to go herbal and hunt for supplements that allege to increase endogenous testosterone. They might start popping Estratest pills, a hormone therapy that includes testosterone, than making a donation in support of the Democrat-backed Employee Free Choice Act, union-sponsored legislation that the AFL-CIO promotes with the promise that it will boost pay for women.
There are also more general points: personal experience (nurture, legislation) seems to matter for males. But political efforts to narrow the pay gap may sometimes be futile for females if the chemicals aren't calibrated. It all suggests a high-test review of assumptions about gender is in order.
Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression" is a Bloomberg News columnist. The opinions expressed are her own.
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