A Grand Gender Convergence Its Last Chapter Critical Review

In most all countries, if you compare the wages of men and women you lot find that women tend to earn less than men. These inequalities have been narrowing across the world. In particular, over the last couple of decades most high-income countries have seen sizeable reductions in the gender pay gap.

How did these reductions come up nearly and why do substantial gaps remain?

Before nosotros get into the details, here is a preview of the main points.

• An important part of the reduction in the gender pay gap in rich countries over the concluding decades is due to a historical narrowing, and oft even reversal of the education gap between men and women.
• Today, education is relatively unimportant to explain the remaining gender pay gap in rich countries. In dissimilarity, the characteristics of the jobs that women tend to practice, remain important contributing factors.
• The gender pay gap is non a direct metric of discrimination. However, testify from dissimilar contexts suggests bigotry is indeed important to sympathise the gender pay gap. Similarly, social norms affecting the gender distribution of labor are important determinants of wage inequality.
• On the other hand, the bachelor evidence suggests differences in psychological attributes and not-cognitive skills are at best modest factors contributing to the gender pay gap.

Differences in human capital

The adjusted pay gap

Differences in earnings between men and women capture differences across many possible dimensions, including teaching, experience and occupation.

For example, if we consider that more educated people tend to have higher earnings, information technology is natural to wait that the narrowing of the pay gap across the world can be partly explained by the fact that women have been communicable upward with men in terms of educational attainment, in particular years of schooling.

Indeed, since differences in education partly contribute to explicate differences in wages, it is common to distinguish betwixt 'unadjusted' and 'adjusted' pay differences.

When the gender pay gap is calculated by comparing all male and female person workers, irrespective of differences in worker characteristics, the result is the raw or unadjusted pay gap. In contrast to this, when the gap is calculated afterwards accounting for underlying differences in education, feel, and other factors that affair for the pay gap, then the result is the adapted pay gap.

The thought of the adapted pay gap is to make comparisons within groups of workers with roughly similar jobs, tenure and instruction. This allows us to tease out the extent to which different factors contribute to observed inequalities.

The chart here, from Blau and Kahn (2017) shows the evolution of the adapted and unadjusted gender pay gap in the US.ⁱ

More precisely, the chart shows the evolution of female to male wage ratios in 3 dissimilar scenarios: (i) Unadjusted; (2) Adjusted, decision-making for gender differences in human capital, i.e. education and feel; and (iii) Adapted, decision-making for a full range of covariates, including didactics, feel, job manufacture and occupation, amidst others. The difference between 100% and the total specification (the green bars) is the "unexplained" residual.²

Several points stand out hither.

• First, the unadjusted gender pay gap in the US shrunk over this period. This is axiomatic from the fact that the blue confined are closer to 100% in 2010 than in 1980.
• 2d, if we focus on groups of workers with roughly similar jobs, tenure and education, we too see a narrowing. The adjusted gender pay gap has shrunk.
• Third, we can see that education and experience used to help explain a very large office of the pay gap in 1980, but this changed substantially in the decades that followed. This 3rd point follows from the fact that the difference betwixt the blue and red bars was much larger in 1980 than in 2010.
• And fourth, the dark-green confined grew substantially in the 1980s, merely stayed adequately constant thereafter. In other words: Almost of the convergence in earnings occurred during the 1980s, a decade in which the "unexplained" gap shrunk substantially.

Education and feel have become much less important in explaining gender differences in wages in the U.s.

The chart here shows a breakdown of the adapted gender pay gaps in the US, cistron by factor, in 1980 and 2010.

When comparing the contributing factors in 1980 and 2010, nosotros see that education and work experience accept become much less important in explaining gender differences in wages over time, while occupation and industry take go more than of import.³

In this chart we can also come across that the 'unexplained' residual has gone downwardly. This ways the appreciable characteristics of workers and their jobs explain wage differences better today than a couple of decades ago. At first sight, this seems like good news – information technology suggests that today in that location is less discrimination, in the sense that differences in earnings are today much more readily explained by differences in 'productivity' factors. But is this really the case?

The unexplained residual may include aspects of unmeasured productivity (i.e. unobservable worker characteristics that cannot be controlled for in a regression), while the "explained" factors may themselves be vehicles of discrimination.

For example, suppose that women are indeed discriminated against, and they discover it hard to get hired for certain jobs simply considering of their sex. This would mean that in the adjusted specification, we would come across that occupation and industry are important contributing factors – but that is precisely because discrimination is embedded in occupational differences!

Hence, while the unexplained residuum gives united states a outset-order approximation of what is going on, we need much more than detailed information and analysis in order to say something definitive almost the role of discrimination in observed pay differences.

Gender pay differences effectually the world are better explained by occupation than by education

The set of iii maps here, taken from the World Development Written report (2012), shows that today gender pay differences are much better explained past occupation than by education. This is consistent with the indicate already made in a higher place using information for the US: as education expanded radically over the final few decades, human capital has go much less important in explaining gender differences in wages.

This blog mail service from Justin Sandefur at the Center for Global Development shows that education besides fails to explicate wage gaps if we include workers with zero income (i.east. if we decompose the wage gap after including people who are not employed).

Gender pay gap after adjusting for instruction and occupation – WDR (2012)^iv

Looking beyond worker characteristics

Task flexibility

All over the world women tend to do more unpaid care work at dwelling than men – and women tend to be overrepresented in low paying jobs where they have the flexibility required to nourish to these additional responsibilities.

The most important evidence regarding this link between the gender pay gap and job flexibility is presented and discussed by Claudia Goldin in the article 'A Thousand Gender Convergence: Its Last Chapter', where she digs deep in the data from the US.^v There are some key lessons that apply both to rich and non-rich countries.

Goldin shows that when one looks at the information on occupational selection in some detail, it becomes clear that women unduly seek jobs, including full-time jobs, that tend to be uniform with childrearing and other family responsibilities. In other words, women, more men, are expected to have temporal flexibility in their jobs. Things like shifting hours of work and rearranging shifts to arrange emergencies at dwelling house. And these are jobs with lower earnings per hr, fifty-fifty when the total number of hours worked is the same.

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 The states increased their participation and remuneration in just some fields. In a recent paper, Goldin and Katz (2016) evidence that pharmacy became a highly remunerated female-majority profession with a pocket-size gender earnings gap in the US, at the same time equally pharmacies went through substantial technological changes that made flexible jobs in the field more than productive (e.g. computer systems that increased the substitutability amid pharmacists).⁶

The chart here shows how quickly female person wages increased in pharmacy, relative to other professions, over the last few decades in the US.

Female person median earnings of full-fourth dimension, yr-round pharmacists relative to other professions, 1970-2010, US – Goldin and Katz (2016)^seven

The motherhood penalty

Closely related to job flexibility and occupational choice, is the issue of work interruptions due to motherhood. On this forepart in that location is again a swell deal of show in support of the so-chosen 'motherhood penalty'.

Lundborg, Plug and Rasmussen (2017) provide show from Denmark – more than specifically, Danish women who sought medical help in achieving pregnancy.⁸

By tracking women'southward fertility and employment status through detailed periodic surveys, these researchers were able to establish that women who had a successful in vitro fertilization handling, ended up having lower earnings down the line than similar women who, by chance, were unsuccessfully treated.

Lundborg, Plug and Rasmussen summarise their findings as follows: "Our chief finding is that women who are successfully treated by [in vitro fertilization] earn persistently less because of having children. We explain the decline in annual earnings by women working less when children are young and getting paid less when children are older. We explain the pass up in hourly earnings, which is often referred to as the motherhood penalty, past women moving to lower-paid jobs that are closer to home."

The fact that the motherhood penalty is indeed about 'motherhood' and not 'parenthood', is supported past further evidence.

A recent study, also from Denmark, tracked men and women over the period 1980-2013, and found that afterward the showtime child, women'southward earnings sharply dropped and never fully recovered. But this was not the case for men with children, nor the case for women without children.

These patterns are shown in the chart here. The offset panel shows the trend in earnings for Danish women with and without children. The second console shows the same comparison for Danish men.

Note that these two examples are from Denmark – a state that ranks high on gender equality measures and where there are legal guarantees requiring that a woman can render to the same job after taking time to give birth.

This shows that, although family-friendly policies contribute to amend female person labor force participation and reduce the gender pay gap, they are but office of the solution. Fifty-fifty when there is generous paid leave and subsidized childcare, equally long as mothers unduly take boosted work at abode after having children, inequities in pay are probable to remain.

Power, personality and social norms

The discussion so far has emphasised the importance of job characteristics and occupational selection in explaining the gender pay gap. This leads to obvious questions: What determines the systematic gender differences in occupational pick? What makes women seek chore flexibility and accept a asymmetric amount of unpaid care work?

1 argument usually put frontward is that, to the extent that biological differences in preferences and abilities underpin gender roles, they are the main factors explaining the gender pay gap. In their review of the bear witness, Francine Blau and Lawrence Kahn (2017) show that at that place is express empirical back up for this argument.⁹

To be clear, yes, there is evidence supporting the fact that men and women differ in some central attributes that may affect labor market outcomes. For example standardised tests bear witness that there are statistical gender gaps in maths scores in some countries; and experiments show that women avoid more salary negotiations, and they often testify item predisposition to accept and receive requests for tasks with low promotion potential. Notwithstanding, these observed differences are far from existence biologically fixed – 'gendering' begins early on in life and the evidence shows that preferences and skills are highly malleable. You lot tin can influence tastes, and you can certainly teach people to tolerate take chances, to do maths, or to negotiate salaries.

What'due south more than, independently of where they come from, Blau and Kahn show that these empirically observed differences can typically simply account for a minor portion of the gender pay gap.

In contrast, the bear witness does suggest that social norms and civilisation, which in turn affect preferences, behaviour and incentives to foster specific skills, are key factors in understanding gender differences in labor strength participation and wages. Yous can read more about this in our blog post dedicated to answer the question 'How well practise innate gender differences explain the gender pay gap?'.

Discrimination and bias

Independently of the exact origin of the unequal distribution of gender roles, it is clear that our recent and even current practices bear witness that these roles persist with the assist of institutional enforcement. Goldin (1988), for instance, examines past prohibitions against the training and employment of married women in the US. She touches on some well-known restrictions, such as those against the preparation and employment of women every bit doctors and lawyers, earlier focusing on the lesser known but fifty-fifty more impactful 'spousal relationship confined' which arose in the late 1800s and early 1900s. These work prohibitions are important because they applied to teaching and clerical jobs – occupations that would go the most commonly held among married women after 1950. Around the time the The states entered World War Ii, it is estimated that 87% of all school boards would non hire a married adult female and 70% would not retain an unmarried adult female who married.¹⁰

The map hither highlights that to this day, explicit barriers beyond the earth limit the extent to which women are allowed to do the aforementioned jobs as men.¹¹

Nevertheless, even after explicit barriers are lifted and legal protections put in their place, discrimination and bias tin persist in less overt means. Goldin and Rouse (2000), for instance, look at the adoption of "bullheaded" auditions by orchestras, and show that by using a screen to conceal the identity of a candidate, impartial hiring practices increased the number of women in orchestras past 25% betwixt 1970 and 1996.¹²

Many other studies have found similar evidence of bias in different labor market contexts. Biases too operate in other spheres of life with strong knock-on effects on labor market outcomes. For example, at the finish of Globe War II only xviii% of people in the The states thought that a wife should work if her hubby was able to support her. This obviously circles dorsum to our earlier point most social norms.^thirteen

Strategies for reducing the gender pay gap

In many countries wage inequality betwixt men and women can be reduced past improving the educational activity of women. Still, in many countries gender gaps in education have been airtight and nosotros nonetheless have large gender inequalities in the workforce. What else can exist done?

An obvious alternative is fighting discrimination. But the evidence presented above shows that this is not enough. Public policy and management changes on the firm level matter too: Family-friendly labor-marketplace policies may help. For example, maternity leave coverage tin contribute by raising women's retention over the flow of childbirth, which in plow raises women's wages through the maintenance of work feel and job tenure.¹⁴

Similarly, early education and childcare tin increment the labor force participation of women — and reduce gender pay gaps — past alleviating the unpaid intendance work undertaken by mothers.^xv

Additionally, the experience of women'southward historical advance in specific professions (e.g. pharmacists in the US), suggests that the gender pay gap could likewise be considerably reduced if firms did non have the incentive to unduly reward workers who piece of work long hours, and fixed, non-flexible schedules.^sixteen

Changing these incentives is of course difficult considering information technology requires reorganizing the workplace. But it is probable to have a large impact on gender inequality, particularly in countries where other measures are already in place.¹⁷

Implementing these strategies can have a positive self-reinforcing outcome. For case, family-friendly labor-market policies that lead to college labor-forcefulness zipper and salaries for women, will raise the returns to women's investment in education – so women in future generations will be more probable to invest in pedagogy, which volition likewise help narrow gender gaps in labor market outcomes downwardly the line.¹⁸

Nevertheless, powerful as these strategies may be, they are only part of the solution. Social norms and culture remain at the eye of family choices and the gender distribution of labor. Achieving equality in opportunities requires ensuring that we alter the norms and stereotypes that limit the ready of choices available both to men and women. It is difficult, but the evidence shows that social norms, besides, can be changed.

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Source: https://ourworldindata.org/what-drives-the-gender-pay-gap

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