Sexual Harassment Pay

Economist Joni Hersch applies the theory of compensating differentials to sexual harassment:

Workplace sexual harassment is illegal, but many workers report that they have been sexually harassed. Exposure to the risk of sexual harassment may decrease productivity, which would reduce wages. Alternatively, workers may receive a compensating differential for exposure to sexual harassment, which would increase wages. Data on claims of sexual harassment filed with the Equal Employment Opportunity Commission are used to calculate the first measures of sexual harassment risks by industry, age group, and sex. Female workers face far higher sexual harassment risks. On balance, workers receive a compensating wage differential for exposure to the risk of sexual harassment.

And how much do you get for the risk of a grope? About 25 cents an hour for women and 50 cents an hour for men.

The theory is surely correct although I am not convinced by the evidence which mostly comes from weak data on wages and the differential rate of sexual harassment by industry. I would be more convinced if women's wages fell more in industries with a lot of sexual harassment after increases in prosecution.

Hat tip: Art Carden.