8.2 Gender pay gap: causes, consequences, and potential solutions

The gender pay gap remains a persistent issue in today's workforce. Women typically earn less than men for similar work, with the gap varying across industries and countries. This disparity stems from discrimination, occupational segregation, work-life balance challenges, and other complex factors.

The consequences of the pay gap are far-reaching, impacting women's economic security and perpetuating gender inequality. Efforts to close the gap include legal measures, workplace initiatives, education programs, and broader social policies aimed at promoting equity and challenging harmful stereotypes.

Understanding the Gender Pay Gap

Definition of gender pay gap

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• Refers to the difference in average earnings between men and women
  • Measured as the difference in median or mean earnings often expressed as a percentage of men's earnings (e.g., women earn 80% of what men earn)
  • Varies across industries with larger gaps in male-dominated fields (finance, technology, manufacturing) and smaller gaps in female-dominated fields (education, healthcare)
• Differs by country influenced by factors such as labor market structure, policies, and cultural norms
  • Generally smaller in countries with stronger gender equality policies and practices (Sweden, Denmark)

Factors behind gender pay gap

• Discrimination in the form of overt pay disparities for the same work and implicit bias in hiring, promotion, and pay decisions
  • Unconscious stereotypes and assumptions influence these decisions (women seen as less competent or committed)
• Occupational segregation where women are overrepresented in lower-paying jobs and industries while men dominate higher-paying ones
  • Stems from socialization, stereotypes, and barriers to entry (lack of mentors, hostile work environments)
• Work-life balance challenges disproportionately affect women who are more likely to take time off or work part-time for caregiving
  • Lack of affordable childcare and inflexible work arrangements hinder career advancement
  • Motherhood penalty results in additional hiring and pay discrimination for mothers
• Differences in education and work experience, lack of pay transparency, and negotiation skills also play a role
• Intersectionality means pay gaps are often larger for women of color and other marginalized groups (disabled women, LGBTQ+ individuals)

Consequences of gender pay gap

• Economic consequences include lower lifetime earnings and retirement savings for women
  • Increases risk of poverty especially for single mothers and older women
  • Reduces consumer spending and economic growth
• Social consequences reinforce gender inequality and power imbalances
  • Contributes to stress, health problems, and relationship strain
  • Perpetuates harmful stereotypes and limiting gender roles (women as primary caregivers, men as breadwinners)
• Intergenerational impact means children of working mothers may have fewer educational and economic opportunities
  • Cycle of disadvantage can be difficult to break

Policies for gender pay equity

• Legal and policy measures to strengthen and enforce equal pay laws
  • Mandate pay transparency and ban salary history inquiries
  • Implement gender-neutral job evaluation and compensation systems
• Workplace initiatives that promote diversity, inclusion, and bias training
  • Offer flexible work arrangements and family-friendly policies (paid parental leave, onsite childcare)
  • Encourage women's leadership and advancement through mentoring and sponsorship programs
• Education and awareness efforts to challenge gender stereotypes
  • Encourage girls and women to pursue diverse fields of study and work
  • Provide negotiation and financial literacy training for women
  • Raise public awareness about the pay gap and its consequences
• Broader social and economic policies to invest in affordable, high-quality childcare and eldercare
  • Promote equitable division of household labor and caregiving responsibilities
  • Address intersecting forms of discrimination and disadvantage (racism, ableism, homophobia)