Wages really do appear to fall when women enter an occupation
Myron Yaster MD, Lynne G. Maxwell MD and David McClain, PhD
Over the past few months we’ve discussed the supply and demand imbalance affecting the pediatric anesthesia workforce primarily in the United States. As demand for service has increased, the supply of pediatric anesthesiologists has decreased. This imbalance or labor shortage compromises healthcare facilities, adversely affects the cost of care, worsens anesthesia workforce burnout, disrupts procedural and surgical schedules, and threatens academic missions and the ability to educate future anesthesiologists. (July 8 2024 PAAD: https://ronlitman.substack.com/p/the-anesthesia-workforce-supply-demand ) (July 9, 2024 PAAD: https://ronlitman.substack.com/p/the-anesthesia-workforce-supply-demand-53a ) Both short- and long-term multifactorial approaches that include increasing training positions and retention policies, improving capacity through innovations, leveraging technology, and addressing financial constraints were discussed.
Increasing the supply of anesthesiologists is a Sisyphean task (In the Greek legend, Sisyphus was condemned by the Gods to repeatedly roll a boulder up a hill only to have it roll down again once he got to the top.) As rapidly as we fill the tank, the actual number of available practitioners may fall because of retirement and changes in how Generation Y and Z value work–life balance. In other words, even if the total number of physicians remains the same, the total clinical capacity will still be reduced due to lower work hours per clinician.
Another issue: Fewer anesthesia residency graduates are entering the subspecialty while demand for our services is increasing. There are many reasons for this but ultimately it comes down to money. American medical school graduates have enormous debt upon graduation. They are forgoing Anesthesia subspecialty fellowships because they are offered large salaries after residency graduation, and there is no bump in salary for completing a Pediatric Anesthesia subspecialty fellowship. Indeed, compared to people going directly into practice from their basic Anesthesia residencies, at the completion of a pediatric anesthesia fellowship, graduates may earn LESS than if they went directly into an adult practice. Thus, many new Anesthesiology graduates, simply cannot afford to do a pediatric anesthesia fellowship. (See July 16, 2024 PAAD: https://ronlitman.substack.com/p/the-sky-really-is-falling-supply )
Finally, the 900 pound gorilla in the room: More than 50% of American medical school graduates are women. As we’ve discussed before, when the workforce tips to more and more women, pay and earnings fall for all including men.1,2 Is this real or a bubba meisa (an old wive’s tale)? I’ve asked a noted economist and friend, Dr. David McClain to help. Dr. McClain is President Emeritus of the University of Hawai‘i, where he also served as business school dean, held two endowed chairs, and was a tenured Professor of Financial Economics from 1991-2019. He earned a Ph.D. in economics from the Massachusetts Institute of Technology in 1974, taught at Boston University from 1978-1990, and has served as a senior staff economist on the Council of Economic Advisers to President Jimmy Carter. Myron Yaster MD
Original article
Harris J. Do wages fall when women enter an occupation? Labour Economics 2022;74:102102. DOI: https://doi.org/10.1016/j.labeco.2021.102102.
Using U.S. census year data from 1960 to 2010, Harris (currently at Occidental College) presents estimates that every 10 percentage point increase in the fraction of women in an occupation leads to an 8 percent decrease in average men’s wages, and a 7 percent decrease in average women’s wages within the same census year. Over a 10 year period, men’s average wages in that occupation decline by 9 percent, while women’s average wages fall by 14 percent.
Harris’ work builds on and extends earlier sociological research on this topic which came to a similar conclusion: a 2009 study published in Social Forces by Levanon, England (both at Stanford at the time) and Allison (at the University of Pennsylvania), “Occupational Feminization and Pay: Assessing Causal Dynamics Using US. Census Data from 1950-2000”.2
Harris’ estimates are of course just that: estimates. His model attempts, inevitably imperfectly, to allow for the myriad other factors influencing compensation for both genders. Further, Harris’ work covers the period ending in 2010. In the nearly 15 years since, the forces of structural change in the economy have continued apace. In the medical profession, in particular, the increasing role of private equity has brought new efforts to keep costs, including the income of physicians of both genders, under control. Still, it seems increasingly probable, in the economy in general and in the medical profession in particular, that wages do indeed fall when women enter an occupation.
These findings also confirm something else that we’ve known for a long time, namely that “female physicians earn significantly less than their male counterparts even after gender differences in specialty, hours, worked, years of experience, age, marital status, family structure, and research and clinical productivity are accounted for.”3 This is true for physicians working in academic and community settings. Indeed, “over the course of a simulated forty-year career, male physicians earned an average adjusted gross income of $8,307,327 compared with an average of $6,263,446 for female physicians—an absolute adjusted difference of $2,043,881 and relative difference of 24.6 percent. Gender differences in career earnings were largest for surgical specialists ($2.5 million difference), followed by nonsurgical specialists ($1.6 million difference) and primary care physicians ($0.9 million difference). These findings imply that over the course of a career, female US physicians were estimated to earn, on average, more than $2 million less than male US physicians after adjustment for factors that may otherwise explain observed differences in income, such as hours worked, clinical revenue, practice type, and specialty.”3
We know this is very troubling information for most (all?) of you, but don’t shoot the messengers! The times they are a changin’. I (MY) was in high school when my congressional district elected our first woman congressman, Shirley Chisholm. Four years later, she ran unsuccessfully for the Presidency of the United States. At the time, the idea of a woman, let alone a Black woman running for the Presidency was considered ludicrous, really an impossible fantasy, even to Shirley Chisholm herself, who said “In this country everybody is supposed to be able to run for President, but that’s never been really true… It was not time yet for a black to run, let alone a woman, and certainly not for someone who was both. Someday . . . but not yet. I ran because most people think the country is not ready for a black candidate, not ready for a woman candidate….The next time a woman runs, or a black, a Jew or anyone from a group that the country is “not ready” to elect to its highest office, I believe he or she will be taken seriously from the start. The door is not open yet, but it is ajar.”
Perhaps that time foreseen by Shirley Chisholm has come. Change is in the air and maybe, just maybe, this finding that wages fall when women enter an occupation will also enter into the dustbin of history.
For many reasons the PAAD is an apolitical forum but please, please VOTE this coming fall.
Send your thoughts and comments to Myron who will post in a Friday reader review.
References
1. Harris J. Do wages fall when women enter an occupation? Labour Economics 2022;74:102102. DOI: https://doi.org/10.1016/j.labeco.2021.102102.
2. Levanon A, England P, Allison P. Occupational Feminization and Pay: Assessing Causal Dynamics Using 1950–2000 U.S. Census Data. Social Forces 2009;88(2):865-891. DOI: 10.1353/sof.0.0264.
3. Whaley CM, Koo T, Arora VM, Ganguli I, Gross N, Jena AB. Female Physicians Earn An Estimated $2 Million Less Than Male Physicians Over A Simulated 40-Year Career. Health affairs (Project Hope) 2021;40(12):1856-1864. (In eng). DOI: 10.1377/hlthaff.2021.00461.