Explaining the ‘inexplicable’ gender pay gap
Search the term “gender pay gap” on YouTube and you’ll find that many of the most watched results feature the concept being heavily contested or dismissed altogether.
It is an illustration of the challenge faced by researchers in informing the general public and policy makers about the gender pay gap and how it works in various societies around the world.
The gender pay gap, defined as the difference in average gross earnings between men and women, undoubtedly exists throughout the world. However, one reason why it provokes debate is the lack of data on its underlying causes.
That was the motivation behind an important new study recently published in the scientific journal Nature Human Behavior, according to Halil Sabanci, one of its authors.
“We need to ensure that policies should demand equal pay for equal work,” Sabanci said Tuesday at an online seminar hosted by the Frankfurt School of Finance and Management. “But the problem with this breakdown is that it requires a huge amount of data to understand where the gender pay gap comes from.”
Gathering a huge dataset
To address this massive data challenge, the study brought together academics from 15 countries around the world, including Germany, the United States, Canada, Slovenia, Japan, South Korea, and Israel.
The researchers had access to an unprecedented amount of data, including workers’ contractual details and tax and social security data, as well as national statistical databases. Compiled over five years, it has helped to provide one of the most comprehensive datasets ever compiled on the gender pay gap.
The study was completed previous research. For example, a common perception of the gender pay gap is that it is largely driven by the so-called “classification” of women and men into different sectors, occupations and companies. In other words, men tend to end up in higher paying professions and this is the main reason why they earn more.
However, one of the key findings of the new study contradicts this. It found that in all 15 countries studied, the “gender gap within work” accounted for around 50% of the overall pay gap. It is when men and women work in the same job, in the same industry or for the same company, and yet women are paid less.
“Previous research has indicated that most of the wage gap disappears if you take into account the workplace and job function,” Sabanci said. “But this research dates back to the early 1990s, and we found much greater ‘in-employment inequality’ than previously believed and also than indicated by previous studies.”
That’s not to say that the idea that men tend to end up in higher-paying professions isn’t true. It is not as significant a factor in the wage gap as previously understood. For example, the survey found that the overall wage gap in Germany is 21%, meaning that a woman earns an average of €79 ($84) for every €100 earned by a man.
However, when factors such as the profession of work are taken into account, the unexplained “within the job” wage gap remains. In Germany, it is 13%, which means that, even in the same job, a woman earns 87 euros for every 100 euros earned by a man.
“It’s not the classic explanation that ‘the main source of the gender pay gap is that women become nurses and men become doctors,'” Sabanci said.
Tackling the problem with the right policies
The researchers say new evidence showing the existence of the “within the job” pay gap means policymakers need to find ways to address it, as well as tackle the long-known problem of putting women in the highest-paying occupations. .
“It implies that there is something to be resolved in the workplace,” Sabanci said. “We need to ensure equal pay for equal work, as well as ensuring that women are well represented in well-paying jobs, as well as addressing these structural issues.
“Our suggestion is that [policymakers must introduce] policies focusing on equal pay for equal work and policies that target hiring, promotion and other segregation processes, the more structural issues, are both vital to addressing gender inequality in labor markets,” he said.
He also emphasized that one of the main causes of unexplained inequality “within work” is what is known as the “penalty of motherhood”. a process of “self-reinforcement” where it is more difficult to be promoted and reach the same salary level as your male colleagues.
The gender pay gap exists
The complexity of the gender pay gap problem is clear from the massive dataset compiled in the study. However, what is not especially complex is establishing the fact that the pay gap exists and is a significant problem, according to Sabanci.
“The drivers and implications, sociological and psychological underpinnings of the gender pay gap … are of course complex,” he said.
“But at its core, the gender pay gap is a pretty straightforward phenomenon. So, by definition, the gender pay gap means that, on average, women and men are basically paid differently. And in In almost all industrialized countries, women earn less than men.”
Edited by: Ashutosh Pandey
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.