How to trade fairly in an unjust society: the problem of gender discrimination in the labor market

Social scientists disagree about the causes of the “wage gap” between male and female workers and, in particular, how much of the gap is due to differences in workers’ productivity. Understanding the underlying causes is important, insofar as this helps identify who is responsible for closing the gap. This information is particularly relevant for specifying the responsibilities of employers, who have dual social roles as economic actors and as citizens. In this paper, I begin with the assumption that many employers underestimate the qualifications of female job applicants in hiring and promotion decisions. The paper then describes a form of discrimination that occurs when many economic actors make this kind of correlated error in their judgments. The paper argues that an individual employer has responsibilities not to make these errors in judgment about female workers, due to the harmful impact on women’s opportunities. An employer also has duties not to exploit female employees, which occurs when he pays them lower wages than he would if other employers did not discriminate against them.