how does the gender pay gap affect the economy

In other words: Most of the convergence in earnings occurred during the 1980s, a decade in which the unexplained gap shrunk substantially. For example, if we consider that more educated people tend to have higher earnings, it is natural to expect that the narrowing of the pay gap across the world can be partly explained by the fact that women have been catching up with men in terms of educational attainment, in particular years of schooling. American Economic Review, 107(6), 1611-1637. gender wage gap, in many industrialized countries, systemic differences between the average wages or salaries of men and those of women. In this chart we can also see that the unexplained residual has gone down. Given this outcome and the fact that we do not have school-level hypotheses, we proceeded with the more parsimonious two-level models (students nested within countries). The gender pay gap across countries and over time, Representation of women in senior managerial positions, Representation of women at the top of the income distribution, Representation of women in low-paying jobs, Multidimensional indices of gender inequality. How does it change over time? GEP has theoretically been explained by greater economic opportunities in affluent societies for gendered self-realization, yet the literature lacks a test . Key Takeaways. The article is structured as follows: first, I discuss existing studies on household wealth and math and STEM aspirations and choices; second, I derive hypotheses from the economic need/opportunity explanation on household wealth and girls' and boys' math intentions; third, I outline the data, measures, and method employed; fourth, I present the findings regarding the tests of hypotheses; fifth, and finally, I draw conclusions and discuss findings. The Gender-Equality Paradox (GEP) describes the phenomenon that the gender gap in the preference for and choice of science, technology, engineering, and mathematics (STEM) majors is larger in more affluent and gender-egalitarian societies. doi: 10.1002/sce.20479. 's (2021) finding of a non-significant family income effect on the choice of female-dominated majors and go against the economic opportunity/need for an explanation of GEP (Charles and Bradley, 2009; Charles, 2011, 2017; Charles et al., 2014). 5. How did these reductions come about and why do substantial gaps remain? The second answer to why household wealth may not have its predicted effects is that parental economic resources may have other than its assumed functions. The fact that women in rich countries are overrepresented in the bottom of the income distribution goes together with the fact that working women in these countries are overrepresented in low-paying occupations. Atkinson, A.B., Casarico, A. There appears to be a negative wealth effect for girls (in line with H1a) and no effect for boys (in line with H1b) in less affluent countries (Figure 2C). The results showed discrimination against women in high-priced restaurants. GESIS Leibniz Institute for the Social Sciences, Germany, German Centre for Higher Education Research and Science Studies (DZHW), Germany. For a discussion of this mechanism, see page 814, Blau, Francine D., and Lawrence M. Kahn. Education at a Glance 2017: OECD Indicators. How is the gender pay gap changing over time? What does it tell us? As to the individual respondents, I dropped one-third of the student sample because of the PISA questionnaire's rotational design. doi: 10.1016/S0272-7757(99)00058-8, Codiroli McMaster, N. (2017). This third point follows from the fact that the difference between the blue and red bars was much larger in 1980 than in 2010. World development report 2012: gender equality and development. J. Sociol. Another explanation sees GEP more critically. Inglehart, R. F., and Welzel, C. (2005). An investigation into the intersections between students' family background, gender and ethnicity in determining choice. doi: 10.1086/499912, Marsh, H. W., Parker, P. D., Guo, J., Basarkod, G., Niepel, C., and Van Zanden, B. This random selection guarantees that the sample of analysis does not differ in background characteristics from the original sample. On the contrary, when the gap is calculated after accounting for underlying differences in education, experience, etc., then the result is the adjusted pay gap. The gender pay gap is the measured difference between male and female earnings, usually expressed as a percentage of male earnings. Note that these two examples are from Denmark a country that ranks high on gender equality measures and where there are legal guarantees requiring that a woman can return to the same job after taking time to give birth. The chart above shows that womens control over household spending tends to be greater in richer countries. (2012). I use multilevel linear probability models instead of multilevel logistic models to compare parameter estimates across models. By this measure the gender wage gap can be negative. This happens in some countries, such as Malaysia.). We expected children from the poorest households to stand out with a smaller gender gap in math intentions (H2a). 29, 581593. The importance of job flexibility in this context is very clearly illustrated by the fact that, over the last couple of decades, women in the US increased their participation and remuneration in only some fields. 263:14681472. Nat. And this pattern is stronger among low-income households within low-income countries. Indeed, studies have found that, when statistical gender differences in agricultural productivity exist, they often disappear when access to and use of productive inputs are taken into account.7. We explain the decline in annual earnings by women working less when children are young and getting paid less when children are older. The chart shows this for the US. Children from wealthier households can more indulge their gendered selves than children from less wealthy households. Rev. Charles and colleagues observed a larger gender gap in math aspirations and STEM graduation in economically more developed countries (Charles and Bradley, 2009; Charles, 2011, 2017; Charles et al., 2014). We tend to find this. A large welfare state may have pushed women more into non-STEM and men into STEM pathways through its combination of extensive educational choice opportunities, a large public sector allowing to combine work and care more easily, and high welfare support. The Supplementary Material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/feduc.2023.1155492/full#supplementary-material. In contrast to this, when the gap is calculated after accounting for underlying differences in education, experience, and other factors that matter for the pay gap, then the result is the adjusted pay gap. The gender pay gap comes up often in political debates, policy reports, and everyday news. The previous discussion focused on particularly aspects one by one. You can add observations by clicking on the option The 60th anniversary of the Equal Pay Act prompted a new analysis of the gender wage gap. The literature lacks a test of this explanation on the individual level, specifically of the effect of (parental) household affluence on the gender gap in students' STEM preferences and choices. Here we show that there are also large gaps in terms of access to borrowed capital. As we show, although economic gender inequalities remain common and large, they are today smaller than they used to be some decades ago. (We explore the ILO data above. In the UK, the gender pay gap across all full-time and part-time work is around 20%. I obtained this measure from Breda et al. Modernization, Cultural Change, and Democracy: The Human Development Sequence. 64, 6790. The gender gap is, on average, eight percentage points in favor of boys (compare the constants for boys and girls in Table 2, which are the average math intentions). Gender is a focal variable. Educ. Goldin, C., & Rouse, C. (2000). The Gender-Equality-Paradox (GEP) is the surprising macro-level empirical regularity of a larger male-favorable gender gap in math and STEM preferences and choices in more affluent and gender-equal countries. Lundborg, Plug and Rasmussen summarise their findings as follows: Our main finding is that women who are successfully treated by [in vitro fertilization] earn persistently less because of having children. Educational attainment and the gender wage gap: evidence from the 1986 and 1991 Canadian Censuses. How can addressing these gaps lead to increased economic prosperity? The 'global gender gap' how many years will it take before men and women are equal? The argument is that in richer contexts, people can afford more to prefer and choose studies freely, without financial pressure, and can indulge their gendered selves to a greater extent than in less affluent contexts (Charles and Bradley, 2009; Charles, 2011, 2017; Charles et al., 2014). At first sight, this seems like good news it suggests that today there is less discrimination, in the sense that differences in earnings are today much more readily explained by differences in productivity factors. The scatter plot here shows available ILO estimates on the gender pay gap (vertical axis) vs GDP per capita (on a logarithmic scale along the horizontal axis). Sociol. First, we see that the series trends upwards, meaning the gap has been shrinking in the last couple of decades. doi: 10.1525/sop.2009.52.2.211, Maltese, A. V., and Tai, R. H. (2011). The line shows national averages, while the dots show averages for rich and poor households (i.e. The first question is why household wealth does not have its predicted effects on math intentions, in particular, why it does not lower girls' math intentions but slightly raises them. That means for. Yet, these alternative explanations can neither account for GEP (cf. A study by Marsh et al. For example, maternity leave coverage can contribute by raising womens retention over the period of childbirth, which in turn raises womens wages through the maintenance of work experience and job tenure.21, Similarly, early education and childcare can increase the labor force participation of women and reduce gender pay gaps by alleviating the unpaid care work undertaken by mothers.22, Additionally, the experience of womens historical advance in specific professions (e.g. Goldin (1988), for instance, examines past prohibitions against the training and employment of married women in the US. The gender pay gap across developed, emerging and developing countries stands at 20 percent, according to the latest estimate from the International Labour Organization (ILO). 362, eaas9899. doi: 10.1080/09620214.2014.895140, Chen, X., and Soldner, M. (2014). The results indicate that gender occupational segregation is an important phenomenon for understanding the persistence of income differences between men and women in Nicaragua. Whats more, independently of where they come from, Blau and Kahn show that these empirically observed differences can typically only account for a modest portion of the gender pay gap. Given greater household wealth in economically more developed countries and the expected gendered effect of household wealth on math intentions (as in H1c), one may expect that household wealth can account for GEP (H3). However, some groups of women must work even farther into the year to earn what White men earned in the previous year. A share above 50% implies that women are overrepresented, in the sense that among those with low wages, there are more women than men. Figure 1. In some cases the reduction is remarkable. Barinaga, M. (1994). 2 So, for example, a country might be coded as No if women are only allowed to work in certain jobs within the mining industry, such as health care professionals within mines, but not as miners. It reaches 25% for key management personnel in the health care sector. However, these observed differences are far from being biologically fixed gendering begins early in life and the evidence shows that preferences and skills are highly malleable. This study fills this gap by testing whether household-level wealth is associated with greater gender differences in math preferences and whether household wealth can account for GEP. 2017. (2021), finally, investigated whether a parental SES index could account for GEP, which it could not. 51, 234243. An assessment of the effect of household wealth on gendered math intentions for 60 countries. When the components of the index are considered, the findings indicate different effects of various types of policy, i.e. The Journal of Economic Perspectives, 12(1), 137-156. The gender wage gap appears to be smaller in exporting firms where it is equal to 19%. Other potentially relevant household composition variables, such as birth order or the number of siblings, are missing in PISA 2012. In the chart we show that this correlation also holds within countries: Womens control is greater in wealthier households. The data in this map, which comes from the World Banks World Development Indicators, provides a measure of whether there are any specific jobs that women are not allowed to perform. This is consistent with the point already made above using data for the US: as education expanded radically over the last few decades, human capital has become much less important in explaining gender differences in wages. (2020) with the PISA 2012 data with a different outcome measure and method. GEP may raise existing gender inequalities due to the better wage and career prospects of STEM than non-STEM education (Christie and Shannon, 2001; Black et al., 2008; Organization for Economic Co-operation and Development OECD, 2017). (1996), who look at discrimination in restaurants. Certain behaviors in childhood are contributing to the widening gender pay gap. When citing this topic page, please also cite the underlying data sources. A study by Wright et al. Sociol. How online learning and remote work could level the playing field for women, Britain is building its first women-only apartment block heres why, Here's how companies can support new mothers, bolster gender equity and perform better, Gender parity: Heres what leading countries are getting right, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. 83, 101113. The Gender-Equality Paradox (GEP) describes the phenomenon that the gender gap in the preference for and choice of science, technology, engineering, and mathematics (STEM) majors is larger in more affluent and gender-egalitarian societies. This makes for a larger gender gap in the wealthiest households. Stoet and Geary, 2018) is remarkable because of greater gender equality in economic and political opportunities and rights in more developed countries and more egalitarian gender-role attitudes. Sex Roles. (2020)who retrieved it from the World Bank (2020)to replicate their analyses of GEP and have comparable estimates. Yet, Breda et al. 10, 2228. The chart here, from Blau and Kahn (2017) shows the evolution of the adjusted and unadjusted gender pay gap in the US.8, More precisely, the chart shows the evolution of female to male wage ratios in three different scenarios: (i) Unadjusted; (ii) Adjusted, controlling for gender differences in human capital, i.e. Above we show that women all over the world are underrepresented in high-profile jobs, which tend to be better paid. 1. In particular, over the last couple of decades most high-income countries have seen sizeable reductions in the gender pay gap. Res. Olivetti, C., & Petrongolo, B. We expected that only children from the richest households would differ from others by displaying a greater gender gap in math intentions (H2b). It is based on salaries paid directly to employees before income tax and social security contributions are deducted. As such, they were restricted to those countries in which taxes are collected on individual basis, rather than as couples.3. Above we show that there are large gender gaps in land ownership across low-income countries. She touches on some well-known restrictions, such as those against the training and employment of women as doctors and lawyers, before focusing on the lesser known but even more impactful marriage bars which arose in the late 1800s and early 1900s.
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