In discussing gender-based wages, there are five approaches to explaining the inequalities that have plagued female U.S. laborers since their collective advent into the workforce in the 1940s. The five explanations typically cited by economists are segregation, human capital, employer preference, statistical discrimination, and institutional discrimination.
Segregation refers to the differences among professions. This approach takes into account the fact that there are occupations that generally have higher wages than other occupations. This is related to gender-based wage differences because women may typically be drawn away from the higher paying occupations because of societal gender roles and stereotypes.
The second approach to explaining gender-based wage inequality is human capital. Human capital acknowledges the fact that often times women invest in human capital that will have lower market returns because they avoid getting involved in career areas that may interfere with their familial duties later in life. Because women invest in less or lower returning human capital they tend to make lower wages than men who invest in more valuable human capital.
The remaining explanations of gender-based wage differences fall under the umbrella category of discrimination. Employer preference discusses the ways in which employers differentiate between potential employees based on noneconomic factors such as physical appearance. Statistical discrimination uses the ways in which employers stereotype groups of people and therefore avoid hiring certain people because of their association with a typical group. This plays into the gender-based wage gap because employers tend to view women as the group they are a part of – the female population – instead of considering each particular woman’s individual human capital. The final approach to explaining gender-based wage differences is institutional discrimination. Institutional discrimination refers to the occurrence of specific groups being disadvantaged by particular rules or systems.
One industry that has a larger-than-average gender-based wage gap is the real estate industry. The Bureau of Labor Statistics performed a 2013 study in which female real estate agents were found to earn 60.6 percent of male real estate agent wages. This is over 20 percentage points lower than the overall gender-based wage gap, collected in 2012, showing that on average, the median female salary was 81 percent of...