Why Does the Gender Wage Gap Still Exist?

Source: Thinkstock

Source: Thinkstock

One of the continued signs of inequality between men and women is the wage gap. Even though women are working more and are more educated than they were in the past, a pay gap still remains. Let’s take a look at why it persists and what steps should be taken to ameliorate it.

Changing gender roles

Economist Claudia Goldin, a Harvard professor and director of the Development of the American Economy Program, writes that there has been a convergence of the roles of men and women in society and the economy. “A narrowing has occurred between men and women in labor force participation, paid hours of work, hours of work at home, life-time labor force experience, occupations, college majors, and education, where there has been an overtaking by females,” she wrote in a recent paper.

Because women are more educated and working in more fields than ever before, the gap is, in general, much lower than it has been in the past. However, the gap still exists, and isn’t shrinking more, because we’re at a sort of stalemate when it comes to the hours women work. Goldin writes that in many occupations, there is a higher value put on working certain times and working more continuously, creating a nonlinear relationship between earnings and hours worked.

This is why women can get paid less for doing the same job for the same amount of time as a man — if they are not working at the right time or they have to take time off for maternity leave. This is more true for some industries than others. According to Goldin, “[a] flexible schedule often comes at a high price, particularly in the corporate, financial, and legal worlds.”

How bad is the gap and what can be done?

There are, as always, varying reports on what the wage gap is. Recently, the International Labour Organization’s Global Wage Report 2014/15 assessed 38 countries and rated the United States as having the largest gap at 36%. The Census Bureau sees a smaller gap: Women earn 78 cents for every dollar men earn.

Goldin’s paper notes that the gap becomes wider as women move through their careers, as they are more likely to take time off to raise a family: “Data for MBAs and JDs shows large increases in gender pay gaps with time since graduation and also reveals the relationship between the increasing gender pay gap and the desire for time flexibility due to the arrival of children.” Her data shows that 21.6% of female JDs with high-income husbands and children are not in the labor force at 15 years (it’s 10.4% for those with lower-income husbands), but there’s virtually no drop-off for women without children.

The lack of flexibility and allowance of time off for mothers affects their ability to continue careers and earn at a rate equivalent to men. The United States is known for not having mandated maternity leave the way many other countries do, most notably Sweden, where the gender pay gap is only 4%, according to the International Labour Organization’s Global Wage Report.

But Goldin argues that greater flexibility in work would benefit all people. “This matter is not just a woman’s issue,” she writes. “Many workers will benefit from greater flexibility, although those who do not value the amenity will likely lose from its lower price.” She cites the “rapidly growing sectors of the economy and newer industries and occupations, such as those in health and information technologies,” as heading toward more flexibility and more correlation between earnings and time worked. She suggests that other industries follow their lead.

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