ABSTRACT
This chapter considers competing theories of how labor markets work, and their implications for gender inequality and comparable worth. The theories discussed include orthodox neoclassical economics, a new neoclassical institutionalism, and framing models from behavioral economics that blend well with findings from experimental social psychology. The chapter also considers Marxist views in sociology and economics, as well as other sociological and institutionalist perspectives. Institutionalists differ from neoclassical economists, however, in recognizing a more ritualistic, habitual, and inertial aspect to institutions that is often denied in neoclassical theory. The neoclassical theory of human capital posits that individuals invest in their stock of skills by paying and/or forgoing something in the present for the sake of some future gain. The market forces specified by neoclassical theory do exist but are seldom decisive against forces articulated by other theoretical perspectives.
