Orazem, Peter; Mattila, J. Peter; Greig, Jeffrey J.

Economic Inquiry Vol. 37 (April 1999): 181-194.

Job evaluation is used to establish pay for many workers in the United
States and has been used to measure the extent of pay discrimination.
However, job evaluations are subject to measurement error that can bias
these estimates. Using computed reliability ratios to adjust for measurement
error in a study of Iowa state government jobs, we find that measurement
errors exaggerate the implied extent of discrimination against predominantly
female jobs by 34%-44%. Measurement errors also exaggerate the number of
independent job factors which affect pay. A practical procedure for making
these corrections is illustrated.