Pay Discrimination Models

In examining whether an employer has set the pay for female employees systematically lower than it did for similarly situated male employees, careful attention must be paid to the range of alternatives reasonably available to the employer at the time it made its decisions. In this article four statistical models are compared with respect to the alternatives they presume and the results they yield. It is suggested that, particularly when doing lost back pay calculations, one should take explicit account of budgetary limitations on the choices available to the employer