Does the labor market discriminate in favor of men over women when it comes to earnings, or is the gender wage gap a myth better explained by the different choices that men and women make prior to and during their time in the labor force? Learn Liberty’sDr. Steven Horwitz sheds some much-needed light on the issue in the video below, and he finds that:

  • On the surface, there is a discrepancy in the salaries paid on the whole to men and women; but this wage gap is not the result of labor market discrimination. Rather it’s a reflection of the different investments made by men and women in their human capital.
  • In economics, human capital can be thought of as the sum total of a person’s knowledge, job skills, education, and experience. Generally speaking, men and women invest themselves differently in each of these areas based on societal expectations, gender norms, and the family, leading to differences in compensation.
  • All things being equal, Horwitz finds that if you compare the salaries of a man and a woman with the same level of experience, education, and career path, the gender wage gap all but disappears.


Check out the video for more: