The Hidden Roots of the Gender Pay Gap

The pay gap between men and women has been a regularly discussed issue for a number of years, including in the current U.S. presidential election. While in most countries the gap has been narrowing over the time, recent research shows that as a greater number of women enter a profession, the prestige and income for workers in that industry starts to fall. This complicates efforts to overcome the remaining gender pay gap.

Gender pay gaps are an issue throughout the world. The average gap between median male and female wages is 15.46 percent and has never been less than 15 percent. While there is large variation between different countries – from 5.62 percent in New Zealand to 36.60 percent in South Korea – men make more than women across the board. The gap is worse in most developing countries. In 2014, Time Magazine reported that the gap in India was 24.8 percent while in China it was 17.5 percent.

Recent research in the United States has shown that the gap is partly caused by different decisions made by men and women on the number of hours they work, and partly by discrimination between men and women when it comes to setting wages.

But another, more insidious form of discrimination also exists. Recent research has shown that the proportion of women in a given occupation has effects on the prestige and pay for the entire profession. For example, as a larger number of women entered the design field from 1950 to 2000, median wages for designers fell by 34 percentage points. In the occupation of housekeeping, the figure is 21 percentage points, and 18 percentage points for biologists. (see more stats here)
The opposite happened with computer programmers. The field initially had a large number of female workers. As more men entered the profession, the prestige and pay for the work both began to rise.

While these are clear examples of discrimination, they are also harder to overcome than specific, individual cases of discrimination. Discrimination in this form reduces wages for an entire occupation, as opposed to an individual female worker. The effectiveness of legislation in this context is minimal. Governments cannot set labor costs for entire industries.

With more and more women entering the workforce across the globe, this issue is occupation-based discrimination is likely to grow more important. As legislative measures curb other forms of gender-based wage discrimination, policy innovation is required to tackle this other, more insidious sort of gender pay gap. It may become the next frontier in women’s movement for greater equality in the world of work.