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Measurement Error in Job Evaluation and the Gender Wage Gap

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  • Chen, Shih-Neng
  • Orazem, Peter F.
  • Mattila, J. Peter
  • Greig, Jeffrey J.

Abstract

Job evaluation is used to establish pay for many workers in the United States and has been used to measure the extent of pay discrimination. However, job evaluations are subject to measurement error that can bias these estimates. Using computed reliability ratios to adjust for measurement error in a study of Iowa state government jobs, we find that measurement errors exaggerate the implied extent of discrimination against predominantly female jobs by 34%-44%. Measurement errors also exaggerate the number of independent job factors which affect pay. A practical procedure for making these corrections is illustrated.

Suggested Citation

  • Chen, Shih-Neng & Orazem, Peter F. & Mattila, J. Peter & Greig, Jeffrey J., 1999. "Measurement Error in Job Evaluation and the Gender Wage Gap," ISU General Staff Papers 199904010800001335, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:199904010800001335
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    1. Hashimoto, Masanori & Kochin, Levis, 1980. "A Bias in the Statistical Estimation of the Effects of Discrimination," Economic Inquiry, Western Economic Association International, vol. 18(3), pages 478-486, July.
    2. Mattila, J. Peter & Orazem, Peter, 1989. "Comparable Worth and the Structure of Earnings: The Iowa Case," Staff General Research Papers Archive 10846, Iowa State University, Department of Economics.
    3. Lucas, Robert E B, 1977. "Hedonic Wage Equations and Psychic Wages in the Returns to Schooling," American Economic Review, American Economic Association, vol. 67(4), pages 549-558, September.
    4. Mattila, J. Peter & Greig, Jeffrey J. & Orazem, Peter, 1989. "Measurement Error in Comparable Worth Pay Analysis: Causes, Consequences, and Corrections," Staff General Research Papers Archive 10845, Iowa State University, Department of Economics.
    5. Lynda J. Ames, 1995. "Fixing Women's Wages: The Effectiveness of Comparable Worth Policies," ILR Review, Cornell University, ILR School, vol. 48(4), pages 709-725, July.
    6. Rapaport, Carol, 1995. "Apparent Wage Discrimination When Wages Are Determined by Nondiscriminatory Contracts," American Economic Review, American Economic Association, vol. 85(5), pages 1263-1277, December.
    7. Paul L. Schumann & Dennis A. Ahlburg & Christine Brown Mahoney, 1994. "The Effects of Human Capital and Job Characteristics on Pay," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 481-503.
    8. Chen, Shih-Neng, 1995. "Two applications of measurement error correction in the economics of human resources," ISU General Staff Papers 1995010108000011768, Iowa State University, Department of Economics.
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