The Persistence of the Pay Gap

This article was written by Isabella Wilde, a student at Occidental College in California, United States.

The wage gap is a major economic issue around the world. Women not only face prejudice and sexist treatment but also face unequal pay, even with major policy changes in the developed world. This is a global issue, as the World Economic Report shows that the wage gap is only 68.4% closed, but is also an especially persistent one in the United States. Women in the US earned only 82 cents for every dollar men made in 2022. More concerning is the rate at which this gap is closing. Between 1982 and 2002, the gap shrunk by 15%, showing tremendous change as women entered the workplace. However, in the last 20 years, it has only improved by 2% (Pew Research, 2022). This rate of change is concerning, especially since workplace policy has become, in many cases, much more inclusive in the last 20 years. Many state governments have implemented longer or paid maternity leave and training programs to increase female participation in highly trained jobs which aren’t bridging the gap effectively, leaving many questioning the real cause of pay disparity.

Previous explanations have proposed that the gap comes from the differing choices that male and female employees make. Some argue that women’s increased familial obligations cause them to choose lower-paying, more flexible careers, while others reason that discriminatory factors push women into less educated or male-dominated careers. If these arguments were true, eliminating discriminatory factors or giving more leave to parents would cause a large reduction in the wage gap. This has not been the case. Many US companies have implemented mandatory maternity leave and enforced anti-harassment practices in the workplace, while non-profits and educators have focused on empowering women to pursue male-dominated fields. While these improvements may not be the perfect solution, their implementation should cause a larger reduction in pay disparity. This line of reasoning points towards another factor preventing equal pay. 

Jorgen Harris, a researcher and professor at Occidental College, set out to examine this question, and with it examine the relationship between female participation in the workforce and pay. Examining various occupations between 1960 and 2010, he finds that a 10% point increase in female representation in a field led to an average decrease in pay of 7% for women and 7.7% for men already in the field (Harris, 2022). This was the case even for fields chosen relatively equally by educated men and women, such as psychology. This shows that women don’t necessarily just choose lower-paying jobs, but that occupations pay less when there’s a higher percentage of women in the field. But how does this knowledge help policymakers address the wage gap?

Instead of solely focusing on the choices of women in the workforce, policymakers need to address underlying causes of pay discrepancy. As identified by Harris, these could include biased perceptions of working women and differing amenities. He argues that the causal relationship shown in his research could be due to a prestige difference in fields with higher female participation. Biased observers are likely to believe that male-dominated fields are more difficult, and may therefore believe that male-dominated fields should be higher paying. Over time, this could lead to pay variation between fields with an influx of female workers and fields consistently male-dominated. On top of this, Harris identifies amenities as a source of pay discrepancy. Women pay higher costs for long hours (Goldin, 2014) and therefore prefer more flexible or minimized schedules. When a high percentage of women enter an industry, this could change the typical working hours of that profession, making it lower-paying. 

To address these issues, policymakers need to promote increased flexibility, more extensive leave policies, and diminish bias. These changes could include universal healthcare, limits on overtime, longer paternal and maternal leave, and programs designed to reduce workplace bias. By only focusing on the percentage of women in an occupation, the US has neglected the underlying sources of pay discrepancy, causing it to persist. To truly remedy this inequity, more comprehensive steps must be taken. 

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References:

Goldin, Claudia. “A Grand Gender Convergence: Its Last Chapter.” American Economic Review, vol. 104, no. 4, 2014, pp. 1091–1119, https://doi.org/10.1257/aer.104.4.1091.

Harris, Jorgen. “Do Wages Fall When Women Enter an Occupation?” Labour Economics, vol. 74, no. 74, Jan. 2022, p. 102102, https://doi.org/10.1016/j.labeco.2021.102102.

Kochhar, Rakesh. “The Enduring Grip of the Gender Pay Gap.” Pew Research Center, Pew Research Center, 1 Mar. 2023, www.pewresearch.org/social-trends/2023/03/01/the-enduring-grip-of-the-gender-pay-gap