The gender pay gap

A gap between the earnings of women and men is a pervasive problem across all countries. Although many countries have explicitly outlawed unequal pay, it remains the case that men out-earn women – by an average of 15 per cent across OECD countries. This has implications for individual outcomes; for example, women face a greater risk of poverty in old age. It also has macro-economic consequences to the extent that the best use is not made of women’s talent in the economy.

The gender pay gap is seen as arising as a result of several factors.

One is occupational segregation, i.e. the fact that men and women are often concentrated in different occupations with different levels of pay; engineers are overwhelmingly male, for example, while nurses are predominantly female.

A second key factor is childcare. Women typically take more responsibility for childcare, and the gender pay gap becomes more pronounced after the arrival of a woman’s first child.

Some see occupational choice and childcare as individual choices and argue that the gender pay gap is not a matter for public policy concern. But individual choices are shaped by social norms e.g. expectations about who should take responsibility for children and whether women should combine work and childcare.

The idea that social norms matter for the gender pay gap is reinforced by a growing body of research evidence that gender norms affect how men and women are treated in the workplace. Hypothetical male and female candidates with identical CVs are perceived in a different way, for example, indicating that men and women are not treated equally.

Policies to deal with the gender pay gap should take account of these underlying causes – dealing with the consequences of childcare, for example, and also tackling underlying social norms around gender.

Mind the Gap” by Pawel Loj is licensed under CC BY 2.0

In cooperation with the Department of Economics at the University of Bristol

Author of the topic: Prof. Sarah Smith, Ph.D.