Empirical studies show that the average woman earns $0.80 for every dollar earned by the average man, after controlling for age and education. Further, the average woman earns $0.92 for every dollar earned by the average man after controlling for occupation . The conclusion is made that occupational choice reduces the wage gap 12 cents and discrimination is left to explain the remaining 8 cents. a) Explain why discrimination may explain more than 8 cents of the 20 cent differential (and occupational choice may explain less than 12 cents of the differential).

b) Explain why discrimination may explain less than 8 cents of the 20 cent differential.