Evaluating Labor Market Arguments with Historical Data

An economist observes that throughout the 20th century, a period of significant real wage growth for the general population, the average number of hours worked per person declined. Which of the following statements best analyzes how this historical trend complicates the argument that the current gender wage gap is the main cause of the gender hours gap?

A researcher observes that over the 20th century, a period of substantial real wage growth, the average number of hours worked per week declined. Based solely on this historical relationship, one could logically predict that completely eliminating the current gender wage gap by raising women's wages would cause women's average hours worked to decrease.

Evaluating Economic Claims with Historical Data

Historical Data and the Hours Gap

Match each concept related to the historical relationship between wages and working hours with its correct description.

Historical data from the twentieth century shows that as real wages for the general population increased, average working hours decreased. This suggests that the ______ effect of the wage increase was stronger than the substitution effect, a finding that challenges the argument that the modern gender wage gap is the primary cause of the gender hours gap.

Evaluating Competing Economic Arguments

Historical data from the 20th century shows that as real wages for the general population rose substantially, average weekly working hours fell. A policy analyst uses this data to argue: 'This proves that the wage gap cannot be the cause of the hours gap. In fact, if we eliminated the wage gap by raising women's wages, the hours gap would likely widen because women would choose to work even less.'

Which of the following statements provides the most accurate critique of the analyst's conclusion?

Two economists are debating the cause of the gender hours gap, where women on average work fewer paid hours than men.

• Economist A argues: "The hours gap is a direct result of the wage gap. Since women earn less per hour, the financial reward for working is lower, leading them to substitute away from paid work and towards other activities."
• Economist B counters: "That explanation is inconsistent with broad historical labor market data."

Which of the following historical findings provides the strongest evidence for Economist B's counter-argument?