How Classical Economic Theory Fails to Explain the Gender Wage Gap, and How Sociology Fills That Gap

Why do economic models miss the mark in their analysis of the gender wage gap? This paper argues that conventional interpretation of the wage equation and that economic models typically overlook critical factors of social life that substantially affect the gender wage gap, and answers the question: What is the impact of certain social factors such as pay secrecy, and percent of women in legislation on wages? This paper aims to evaluate the differences in a model’s effectiveness if social measures are added. Through regression analysis of family level data on household heads and wives aggregated with state level social data, it was found that social variables positively impact men while negatively impacting women; however, results for women are not statistically significant.