Kahn-Blau Research Cited

Prior pay doesn’t justify lower salaries for women, court rules
Autism Awareness
Thursday, April 12, 2018

For many years, Lawrence M. Kahn and Francine Blau have been influencing the way people around the world think about gendered pay disparities faced by women.

This week, the professors’ contributions were underscored when a federal appeals court cited their research in its rationale for ruling that pay based on former salaries is biased.

Using past pay “perpetuates the very gender-based assumptions about the value of work that the Equal Pay Act was supposed to end,” the court said in ruling that prior salary cannot justify pay differentials between men and women.

The ruling issued by the 9th U.S. Circuit Court of Appeals in San Francisco cites a 2017 paper, “The Gender Wage Gap: Extent, Trends, and Explanations,” published by Kahn and Blau in the Journal of Economic Literature.

The decision notes, “Despite progress in closing the wage gap, gender pay disparities persist in virtually every sector of the American economy, with women today earning on average only about 82 percent of what men make, even after controlling for education, work experience, and other factors.”

Kahn is the ILR School’s Braunstein Family Professor and Professor of Economics, and Blau is ILR’s Frances Perkins Professor of Industrial and Labor Relations. Both are professors of Economics.

The ruling, as it stands, gives women an opportunity for redress if their employer uses past salary to set current salary, Kahn said in an interview.

If upheld, the ruling would give employers who use past salary in setting current salary an incentive to stop doing so, even in the absence of a lawsuit, in order to avoid a potential lawsuit, he said.

“The decision is potentially quite important because removes what could otherwise be a prominent employer defense against discrimination cases, namely, that the employer was merely following what the market dictated for men’s and women’s salaries. The most striking thing about the opinion is that past pay cannot be used not only by itself, but also in conjunction with other factors as a defense.” Kahn said.

“This decision was influenced by our research showing that a sizeable gender gap remains even controlling for other factors that influence pay such as schooling, experience, race, union coverage, occupation and industry. The court case illustrates the power that academic research can have in affecting real-world decisions.”

To hear Blau discuss the gender pay gap in an interview on NPR’s Planet Money this week, go here.