Since the 1860s, there has been immense discussion about a particular economic question: is there a gap between the wages offered to men and women, and if so, why?
Research shows that such a gap did exist at that time, and still does today. Many theories try to explain it, the most common being differences in education, work hours, and other observable factors. However, it has been proven that such factors explain only around 50% of the wage gap; the remaining reasons are more obscure.
Claudia Goldin, American historian and Harvard University’s Henry Lee Professor of Economics, has done extensive research on the matter for decades, and we look at some of it in this blog. Though the research presented here is from pre-2015, the ideas introduced enable a more nuanced understanding of the wage gap and how to potentially reduce it.
The less conspicuous factors behind the gender wage gap
Upon examining the post-graduate careers of MBA students from the Booth School of Business, Goldin found that the gap steadily increased as the years progressed. 9 years after graduation, 13% of women and 1% of men had stopped working. In another 1-7 years, male earnings were 60 log points higher than that of women.
A main contributor to that eventual widening of the gap was childcare. Women, more than men, are known to adjust their careers for family life. The latter spent 3.5 fewer hours per week on childcare and 5.6 fewer hours on housework in 2013. This disparity doesn’t just stem from personal choices; it also stems from societal expectations. In 2012, despite 79% of Americans rejecting the idea of women returning to their “traditional role in society”, a whopping 84% felt that having a full-time working mother was not ideal for children.
Given the pressure, it’s no surprise that while women without children work 3.3% fewer hours than men, the number jumps to 24% for those with children. MBA mothers also tend to choose family friendly jobs, rather than advance their career.
Childcare isn’t the only hidden factor!
In this paper, Goldin brings up the notion of jobs with nonlinear hour-to-wage proportions. In some jobs, the ratio between hours worked and wages provided is inconsistent – frequently those in which raises require competition and bargaining. For instance, an employer might favor an employee who works 8 hours in office, as opposed to one who works 6 hours in office and 2 from home.
Goldin specifies the field of law as an example of such nonlinearity. Two lawyers, one working at a law firm and the other as a general counsel in an organization, will be rewarded differently despite having similar educational backgrounds. Pharmacists, however, will be paid at the same rate whether they work full or part time, making the wage a more linear one.
As stated in the prior point about childcare, women often need to work fewer hours in comparison to men, meaning they are heavily impacted in any field with nonlinear pay. Consequently, such fields end up with a wider gender wage gap.
Claudia Goldin’s research has exposed factors behind the wage gap that are not obvious upon first glance. While the points within this article do not suggest a concrete solution for it, the insights they provide do bring us slightly closer to finding one! By understanding these inconspicuous facets of the gap, we can work towards bridging it, step by step.
