The Economics of Household Labor and Pay Differences between Sexes

The Economist recently published a summary of recent study on division of household labor which reinforces a lot of what we already know.  The previous studies that it references are worth mentioning, and some of the other conclusions that it draws are probably new. Even in a developed country like America, women spend three times the time doing housework on an average day as men. The traditional economic explanation of this has been that since an average American woman earns 20% less than a man, the family earnings would be maximized if the lesser paid partner did the unpaid work at home.  There is some evidence to support this hypothesis. Women who earn more do less work at home. The recent study, however, has found alternate explanations for division of labor. It suggests that how much housework an average man does is proportional to how much he likes to do it.  For a man the time he spends on housework is not correlated to how his income compares to the average. For a woman unfortunately, her preferences play no role in the time she spends on household work.

On the question of the pay gap, you always wonder whether it is the cause or the effect. Do women do more housework because they earn less or do they earn less because spend more time and effort in managing the house (and consequently less time on activities that build value). That an equally educated woman earns less over her lifetime than a man is a reality true even for those with the best qualifications, and part of the explanation is logical. A women takes more breaks from her career, whether to support her spouse or to raise children. In fact, way back in 2005, I came across a study of female graduates of Harvard which found that as many as 40% of them took time off at some point in their lives. The post is here.

In 2009, New York Times reported a study done by Payscale. It found that adjusted for the type of jobs taken up by a female, industry, type of company and other factors, at least for jobs earnings less than $100,000 an year, the 20% pay gap between men and women disappeared. So the difference can be explained by career choices than discrimination, except at higher salaries.

This has always been an area of interest and the relevant sources are documented below. I have always believed that - if you control for other factors - how gender roles were played and household labor was split between parents is significant determinant of how much responsibility a man takes at home. One day, hopefully, I will find a study that explores that.

References:
1) 2012: The economist article, “The ironing lady”, is here.
2) 2012: The Research Paper, “The Role of Preferences and Opportunity Costs in Determining the Time Allocated to Housework”, is here.
3) 2009: The New York Times article, “Women Earn Less than Men, Especially at the Top,” is here.
4) 2004: My own post, “Work, Family, Personal Life: Why Not All Three,” about the conference and study at HBS is here.

Life Changers - Finding meaning through Amy

As I look back, whenever I thought I was struggling (professionally or personally) in life is when I have done the most meaningful work. This post is meant to be a part of the series of reminisces of those time periods.

A few years ago, I was involved with an organization dedicated to the cause of the domestic violence victims in the tri-state (New York - New Jersey - Connecticut) area.  Let’s call it – ‘Life-Changer’. Life-Changer is very particular about confidentiality to ensure the safety of their clients and people who work with them, their staff and especially volunteers.  It office location and shelter addresses are secret. It doesn’t give references to its volunteers. It also avoided social media presence and web activism till recently.

Apart from the fact that women’s causes naturally resonate, a big reason I joined Life-Changer was guilt. I regret not doing enough for someone very close who went through a tough situation in her life. But as I look back I realize that the work I did gave me a sense of purpose to anchor my own life. Apart from helping with their outreach, marketing and activism, I worked closely with few of Life-Changer’s clients. This portion of my work was the most rewarding.

On my first such case I advocated for Amy (by now you know that’s not her name). Amy married someone from her own country and moved to the United States with him.  She needed to get a US passport for her recently born baby. The Life-Changer staff member who was working with me had told me the details of the case. Amy had been here for less than a year. Like many women who move with their husbands, Amy wasn’t eligible to work, and had no source of income.

I met Amy at the steps of the court-house. This was her third visit. Passport application for a child needs to be signed by both parents. Only problem was that Amy’s husband deserted her before the child was born and Amy had no idea where he was.  We said hello and talked a bit using signs. Amy spoke little English. This was a woman living alone with a newborn baby in a shelter. Amy was in a country different from her own; she was not very fluent with the language and had almost no support structure. For someone going through all this Amy was really strong. I was worried earlier, but I realized apart from the language, Amy didn’t need me much.

We went in the court. I did my part – filled up the baby’s papers, presented them to the officer and just before she was about to put the rejected stamp on our application - told her Amy’s story, mentioned the relevant exception to the law and presented the documentary evidence. She was sympathetic and filled an additional document to expedite the case while we were standing at the window and the others were waiting. I thought she must have seen many such cases before.

Amy was happy when we came out of the court.  She understood that her application was accepted because the officer hadn’t given it back to her. I tried to tell her that she should get her son’s passport in week to ten days.  I wanted to walk with to her public transport location and make sure she could take the right route to the shelter. She politely refused. As we said good-bye she hugged me. I watched her go. Amy was ready, to take the world on her own. She would be first of the many women who I will learn from.

Now that I am in a different geography, not actively involved I think I can actually use the real name instead of Life-Changer. I should think about that.

Book Update :  After my recent tryst with psychology and history am back to fiction. Read, 'A Walk Across the Sun' and 'The Girl Who Played with Fire'.  

Insights from Greeks: The Evolution of Morality and Religion

All cultures have their notions of religion, morality and the supernatural. Religion is most commonly based on dogma and defines morality. Divine powers are someone you turn to in your hour of difficulty or need because they can do things that you can’t. I am going through an interpretation of Homer’s Odyssey, set in eighth century Greece. Couldn’t help but compare how our thinking has evolved on the subjects.

First interesting insight is about religion. Religion in Homerian Greek (and more so a few centuries before that) is primarily based on rituals and ceremonies than on dogma and doctrines based on nature of God and man.  As a result it is flexible and open to interpretation. Gods aren’t the upholders of morality, just beings which can be approached by mortals. God’s are not beyond their vices either. (I can’t help but draw a parallel with certain aspects of Hindu religion). But in the Homerian Greece Gods are more moods than powers. When Aphrodite (the Greek God of love) shines on Helen, that emotion overpowers all her decisions and actions to the extent of her leaving her husband and child for another man. Homer’s protagonists of do not make a choice against the will of Gods. They don’t engage in deliberation to act. They go with the flow. In fact those with the power to choose against the will of Gods are actually bad people (the suitors). Professor Dreyfus, who teaches a psychology course based on the poem at University of Berkeley, says that Homer believes that those who go with the emotion actually lead a fuller life.  (He was kind enough to reply to my mail almost immediately. Bragging Time – I finished the full podcast series.)

Also thought provoking is the Greek idea of morality which (at least till then) is very tribal. Friendship, though more valued than love, is an alliance based on mutual advantage. Humanity – supposed to be an instinct today – is an aspiration, often forsaken under forces of passion and interest.  An average Greek (not the philosopher) owes service to a friend as much as he owes pursuit and injury to an enemy. Mercy, compassion and reasonableness are special graces than necessary duties.

I can’t help but contrast with the thinking of today. My first instinct is to lean towards the right to making one’s own choices. I also believe that the choices have to be deliberated e after weighing the pros and cons, including how one’s actions affect other people. I am also guilty of assuming fairness, compassion and reasonableness are fundamental traits defining us as a species. The idea that less than 2000 years we thought completely differently is an eye-opener.

I thought more about the Greek notion of morality and realized it follows naturally with going with the flow. Ancient Greeks were not afraid of acting on their first instinct. It can even be said that they were less hypocrite than people of today. But I am still not ready to believe that world would be better place if all us of did that. 

PS: That we seek divine help in difficult times is another human weakness I guess.

Thought Provoking : Indian Women Are the Most Stressed Out

Women's issues are a subject close to my heart, and recently I came across a study that was though provoking enough for me to take a break from the blogging hiatus.

A research survey done by Nielson of 6500 women across the world found that Indian women – especially the educated professional ones – are the most stressed out in the world. Indian women balance career ambitions while shouldering a large part of responsibilities of the household in a traditional unequal society. First generation career women are the most stressed out as they try to live to the Indian expectation of an "ideal daughter", "an ideal wife" or an "ideal mother", and overcompensate at work to be taken as seriously as their male counterparts. While an educated Indian female is expected contribute to the earning the family bread, Indian males (or at least a majority of them) are yet to evolve to take up a their fair share of  household duties.  In fact, if I may, being educated is thus a double whammy. If you are ambitious on top of that, good luck. You just need to be a superwoman.

The purpose of this article is to commend women who have decided to take the more difficult path of trying to balance it all. What these Indian women are doing is no mean feat.  But I have even greater respect for those of my friends who have the courage to not settle for inequality and question it. The road is unchartered and tough but they are the path bearers to social change.   

The other intended audience of this article is the educated Indian male. This is an invitation to think. Can you claim that you take your fair share of responsibility at home?

The HBR article can be read here.

The other angle to this debate, that of tapping into the huge educated workforce deserves a separate post of its own.

The Wharton India Economic Forum: Healthcare (India versus US)

On Saturday, March 27, 2010 I attended the 14th Wharton India Economic Forum. So I believe the event started in 1996 marking five years of liberalization of Indian economy. There was an impressive list of speakers. You had people from Private Equity, Information and Technology, Social Sector, Healthcare, and Education and Training. There also was panel of woman leaders talking about issues of glass ceiling at workplace.



In the morning, I attended the healthcare panel. I found the Sangita Reddy, (Director, Apollo Hospitals) had the most memorable insights. She pointed out the efficiency of health care services in India by comparing the back office & administrative costs in the two countries; 7 percent in India versus 25 percent in US. I am impressed that India has basically managed to keep the cost of a by-pass surgery stable for 27 years despite the high rate of inflation. She underscored her point by mentioning that Indian doctors were more willing to do a 'Beating Heart Surgery', a very complicated procedure that saves costs and has a greater probability of recovery. Apparently, 97 percent of heart surgeries are beating heart in India versus less than 10 percent in the US. You would think that a country as technologically advanced as the US would have adopted an advanced technique. This underscores the discussions about healthcare that I have with my friends, some of them healthcare professionals. They insist that in India doctors are more efficient and more willing to actually 'treat you'. My take on this has always been that a society with such a high instance of law-suits and 'do no harm' principle causes doctors to cover their backs first with multiple tests, before initiating any treatment. The inefficiency in the system is greater because the payment is made by a third party. Since the money appears to go from the insurance company's pocket, neither doctors nor patients are concerned about efficiency. Remember, your insurance premium is actually a 'sunk cost', money that you have spent anyway.



Bhargav Das Gupta, CEO and MD, ICICI Lombard talked about the new products to finance healthcare in India, especially for really poor people. The low penetration on insurance (less than 5%) is an opportunity for insurers, but the low awareness a huge challenge. Only yesterday I was reading how Indians do not care much about health insurance. There was the perennial subject of drugs patents and generics and branded drugs, and the long winded process to discovery of new drugs. What really stayed on with me was an interesting tit bit about ingenious water filters. Homi Khusrokhan, Advisor to Tata Healthcare explained how the Tata's successfully developed an extremely cheap water filter that removes 99.7% bacteria from water using burnt rice husk and nano silver, without power. On a personal note, I really liked Khusrokhan, the man had a wealth of experience with a really humble Lucknowi demeanor. The composition of the panel was extremely impressive. The organizers had ensured that there were representatives from delivery (Apollo), pharmaceutical (GSK and Excel life sciences) and the payers (Tata Healthcare, ICICI Lombard and GSK Venture), ensuring that all aspects of this complex issue are covered. I hope to write about other panels and speakers in my later posts. In the meantime you can have a look at the complete list of speakers & panel members here

Books Update: I am back to fiction for the time being. Finished 'Memoirs of Geisha' sometime back. Loved the portrayal and discovered few unknown aspects of the traditional Japanese culture

The huge difference in work-cultures

Yesterday, I was at the office of a non-profit I am involved with here in New York. I noticed something that made me think and compare the working styles and, the so called open door policies.


It so happened that a gentleman whom I recognize by face as the Executive Director, the senior-most person in the organization, walked over to a door in the hallway. Standing outside the room he asked, " Would you like to talk to me about that video shoot/press release (or something similar) right now." The lady inside the room mentioned that she was working on another project/assignment at that time. He responded with the equivalent of - Fine, we will do it at a later then. He later strolled over to my work-space, said hello, and inquired if he could ask a question. I must mention that we have never met formally, till today.


I tried my best to recall anything remotely similar to that in my five years of experience in India but couldn't. I have worked in highly unstructured software setups and fast growing private sector insurers and have had some really great bosses. But the notion of hierarchy, and your boss having the final say on your time is embedded in our work culture. I don't think any Indian could have ever responded in the way the lady or the gentleman did. Our culture where age and position imply authority, is partly to blame. The expectation of deference to your superiors' wishes built into Indian nature, is further strengthened by the fierce competition due to India's huge population. As a result most of us fast realize, consciously or sub-consciously, that "Yes Sir" is the safest and often the fastest, route to career growth.


It is pertinent to mention that the non-profit actually serves Asian clients, including South Asians. The question is, if we can do it here, why not back home?

The Talibanization of Pakistan - II

The concluding part of the the my article at desiclub.com explores the consequences of a talibanised state and the future of the country. Read it here

Of NRI Marriages

My post on this subject does not belong here, so its a good idea to read it where it got published. Link