5 Quick Facts About the Gender Pay Gap
Do women still earn just 79 percent of every dollar men make? A look at what's really going on with the gender wage gap
In America and the U.K., the "gender pay gap"—the space that separates average male-worker wages from average female-worker wages—has been picking up steam as an important political topic, especially as elections near. In the process, a lot of misinformation is also gaining traction. Yet rigorous research on the gender pay gap paints quite a different picture than the political spin on it does.
As evidence, see this recent paper from the National Bureau of Economic Research ("The Gender Wage Gap: Extent, Trends, and Explanation"), co-authored by Cornell economists Francine D. Blau and Lawrence M. Kahn. Blau and Kahn looked at gender pay gap stats dating back to the 1950s and stretching through 2010. What they found—in the U.S. and other economically advanced countries—is that the difference in average pay between men and women in the workforce has been declining for decades. But this hasn't been happening at an equal rate for workers across income brackets, nor has progress been steady over the past few decades.
The gender pay gap shrank the most in the 1980s. "The period of strongest wage convergence between men and women was the 1980s," found the economists. Progress at narrowing the pay gap "has been slower and more uneven since then."
In 1980, American women's average hourly earnings were about 63 percent of men's, but by 1989, women were earning 73 percent of what men did. But since the 1980s, the gap has closed much less quickly. In 2010, women were making 79 percent of men's overall wages. In 2014, full-time female workers earned about 79 percent of what men did on an annual basis and about 83 percent when wages were measured weekly.
Wage-gap narrowing wasn't tied to government policies. In a section on the impact of government policies on the gender pay gap, Blau and Kahn explore whether "the time path of the increase in women's relative earnings appears compatible with an effect of [federal] laws and regulations." In short: not really.
"We see no indication of a notable improvement in women's relative earnings in the immediate post-1964 period that might be attributable to the effects of the government's antidiscrimination effort," Blau and Kahn write. And while gains were made in select fields, the overall gender pay gap "remained basically flat through the late 1970s or early 1980s," also times of relatively high government action in this area. Meanwhile, "the largest female relative wage gains and the strongest evidence of a decline in the unexplained gender wage gap were during the 1980s…which includes a period in which the government's antidiscrimination effort was noticeably scaled back."
So what does explain the closing of the gender pay gap in the 1980s? One suggestion researchers offer is a shift in the labor market that favored women. The decline of manufacturing jobs and other industries involving physical labor during this time, along with the rise of white-collar and computer-utilizing jobs, "appear to have favored women relative to men in certain ways." Trends that tilted toward men in the 1990s—the researchers don't mention any industries in particular, but the early Internet companies seem one likely culprit—may explain the slow down in closing the gender pay gap.
Gender differences in occupations and job roles matter most. Researchers call variables like education level and past experience "human capital factors." In the mid to late 20th century, human capital factors were one of the biggest reasons behind the gender pay gap. But the role these factors play has been dropping, due "both to the reversal of the education gap between men and women and the narrowing of the gender gap in experience," Blau and Kah note.
In 1980, the experience gap explained 24 percent of the gender gap, but this was down to 16 percent in 2010.
Yet "employment segregation by sex" still factors significantly into wage differences. In fact, "gender differences in occupations and industries are quantitatively the most important measurable factors explaining the gender wage gap," according to Blau and Kahn. The share of the gap accounted for by "factors like occupation and industry actually increased from 27 percent of the 1980 gap to 49 percent of the much smaller 2010 gap," they write.
High-income women have seen the smallest wage-gap closing. Between 1980 and 2010, the wage gap narrowed more slowly for women at the top income and job levels than it did for lower-paid and less specialized counterparts. By 2010, the gender wage gap, "which had been similar across the wage distribution in the 1980s, [was] larger for the highly skilled than for others," write researchers.
"Labor force interruptions" to have or care for children and a need for more flexible hours may penalize workers in some professions, such as law and business, more than those in lower-wage occupations, they suggest. Studies have shown that "work histories and current hours seem to be a particularly important determinant of gender wgae differences" in some high-wage professions, and work flexibility (working non-traditional hours or from home) imposes a higher wage penalty on people with law degrees and MBAs.
Findings are fuzzy about the impact of family-leave policies. "The effect of parental leaves on the gender wage gap is theoretically ambiguous," according to Blau and Kahn's research. "Empirical evidence in the United States suggests that the effect of the [Family and Medical Leave Act] has been modest."
If anything, the Family and Medical Leave Act (FMLA)—which mandates 12 weeks unpaid but job-protected medical leave following the birth or adoption of a child or in event of a spouse or dependent falling seriously ill—has had a small positive effect on women's employment level overall but no effect on the wage gap, according to one large study. A smaller study on the effect of California's 2004 law mandating six weeks of paid parental leave also showed that more people went back to work post-leave, but the effect on wages wasn't significant. And a 2015 study suggested the FMLA increased the gender gap in promotions.
Global studies show similarly mixed results. In a 1998 study of nine Western countries, not including the U.S., researchers found women's wages were unaffected by short parental leave policies but suffered with leave policies of more than five months. An earlier study by Blau and Kahn found that the expansion of family-leave policies in non-U.S., economically advanced nations between 1990 and 2010 resulted in an overall increase in female labor force participation but was also associated with "a lower likelihood of women having full-time jobs or working as managers or professionals."
