Yahoo Finance Progress in shrinking gender wage gap stalled for 20 years
Despite major educational gains for women, the wage gap between men and women hasn't changed since the start of the millennium, according to two recent studies.
One study found that women only make 82 cents to every man’s dollar in 2022. That’s despite women earning 42% of college degrees compared to men’s 32% as of 2020.
While it isn’t clear why the gender gap persists, there could be one compelling reason: having a family.
Senior researcher and author of Pew Research Center's “The Enduring Grip of the Gender Wage Gap”, Rakesh Kochhar, has studied economics for thirty-six years. He told Yahoo Finance that the gender gap has persisted because of a “motherhood penalty”.
“The gender wage gap coincides with parenthood. When women transition to motherhood, there is an increase in the gender wage gap,” Kochhar said.
The dad premium
Kochhar said that because of a double standard, women’s wages stagnated and didn’t match their male counterparts. Fathers have made much more than mothers — what Kochhar called a “ fatherhood premium.”
“Fathers tended to earn more because they worked more hours. They worked on average 40 hours a week, while mothers worked 37 hours a week. Employers rewarded fathers who had children at home and fathers earned more than women who did and didn’t have children at home,” Kochhar said.
Age was also a factor in women lagging behind men. The Pew study found that as women entered into their peak childbearing years of 25-34, they earned less than men— about 92% of men’s wages. However, as women in the 35-54 age range earned 83% as much as male workers.
Also, Kochhar said: As women leave and re-enter the workforce, they lose ground to men who never left the workforce. The study found that mothers ages 25-44 earned 85% as much as fathers. Women with children at home ages 45-54 earned 81% as much as men with children at home.
Racial gaps
In addition to age gaps, there are also racial differences in the gender wage gaps. The Pew study found that white women earned 83% of what white men earned. Kochhar said that minority female workers fared worse. Black women earned 70% and Hispanic women only earned 65% was much as white men.
“There is discrimination that causes the wage gap. There are also different education levels, with Black and Hispanic women having lower rates of four-year college than white men,” Kochhar said.
Even though Asian women are closest to income parity with white men, they still lag behind, making 93 cents for every white man’s dollar.
Kochhar also said that the type of jobs men and women have also contribute to the wage gap. Men who had union blue-collar jobs or high-income tech careers earned more than women in service jobs.
“Men are more likely to have blue-collar and STEM jobs that tend to pay more. Women are more likely to have service, healthcare, and education jobs, quite low-paying jobs,” Kochhar said.
Family leave impact?
Another study, “Why Did Gender Wage Convergence in the United States Stall?” from the National Bureau of Economic Research ( NBER), finds that the Family Medical Leave Act ( FMLA) may have ironically widened the gender wage gap.
The act signed in 1993 by President Bill Clinton gives 12 weeks of unpaid leave to new parents who are employees of companies with more than 50 workers. While the act gives family leave to all parents, mothers predominantly take family leave after they give birth.
The basis of the study: the Current Population Survey of nearly 2.5 million full-time male and female workers aged 18-65 from 1975-2015. NBER researchers discovered that family leave policies reduced gender wage parity by 76% to 96%.
“Women often worked fewer hours because they took more maternity leave. The FMLA led to lower promotion rates for women and higher wage growth for men," Benjamin Posmanick, one of the study's authors, said.
The NBER study cited a Department of Labor survey, which noted that women took 37 more days of family leave than men do. Posmanick added: “After the FMLA was implemented, higher wages were offered to men. Discrimination against women who took family leave led to the gender wage gap."
How employers could help
While the authors of both studies had no policy recommendations, they said that employers can take action. Kochhar, for example, said employers could give more women prominent, senior roles in the workplace — and thus higher wages.
“Women working more full time and in managerial positions could change the gender wage gap,” Kochhar said.
Ella Vincent is the personal finance reporter for Yahoo Finance. Follow her on Twitter @bookgirlchicago.
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