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More on the Gender Pay Gap


Today, we will discuss a highly prevelant socio-economic phenomenon: the gender pay gap. Today's epsiode is one that I have made on popular demand after our episode titled "Gender Pay Gap: Decoding the 2023 Nobel Prize in Economics". For context, the 2023 Nobel Prize in Economics was very recently awarded to Professor Claudia Goldin (congratulations!) for her explerary research contributions about the economics of womens' role in society.


Claudia Goldin is a prominent economist known for her work on gender economics and labor markets. Goldin has extensively researched and written about the gender wage gap, exploring the factors that contribute to disparities in earnings between men and women. Her work often emphasizes the role of occupational choices, education, and family responsibilities in shaping women's careers.


One of Goldin's influential concepts is the "gender revolution," which refers to the significant changes in women's roles in the workforce and their pursuit of education over the 20th century. She argues that understanding these historical trends is crucial for addressing contemporary gender inequalities. Additionally, Goldin has examined the impact of policies and cultural attitudes on women's economic participation.


Now, coming to the gender pay gap.

The gender pay gap refers to the difference in average earnings between men and women in the workforce. This gap is a reflection of the disparities in the remuneration that men and women receive for their work, and it is a widely acknowledged and studied aspect of gender inequality in the labor market.


Image Source: Forbes India


According to data from the World Economic Forum's Global Gender Gap Report 2021, the global gender pay gap stands at approximately 16%, meaning that, on average, women earn about 84 cents for every dollar earned by men.

The gap varies significantly by region, with some countries reporting larger disparities than others. In many cases, women are underrepresented in high-paying industries and leadership roles.


Occupational segregation, where women are concentrated in certain industries and roles, contributes significantly to the gender pay gap. Women often dominate lower-paying sectors such as healthcare, education, and social services.


The gender pay gap tends to widen for mothers compared to women without children. The "motherhood penalty" refers to the negative impact on a woman's earnings associated with having children, resulting from factors like reduced work hours, career interruptions, and biased perceptions of commitment.


While women have made significant strides in education, earning more degrees than men in many countries, these educational gains do not always translate to equal pay. Women may still face barriers in accessing high-paying jobs or advancing to leadership positions.


Despite increased awareness and efforts to address gender pay disparities, progress has been slow. The gender pay gap has not closed at the rate many advocates and policymakers would like to see, indicating that systemic issues persist.



These facts underscore the complexity of the gender pay gap and highlight the need for comprehensive strategies to address the underlying causes and promote gender equity in the workforce.

What leads to the gender pay gap?

Underrepresentation in leadership is a significant factor. A considerably lower number of women hold managerial and leadership positions, especially at higher levels. When women do assume managerial roles, they often concentrate in support functions like human resources and financial administration, as opposed to more strategic roles. This concentration contributes to a lower average salary for female managers compared to their male counterparts.


Differences in working hours also contribute to the gender pay gap. The varying patterns of workforce engagement by women and men are often cited as a primary cause. The International Labour Organization (ILO) highlighted in the Global Wage Report 2018/19 that women are more likely to work part-time than men in the majority of the 73 countries studied. This discrepancy is frequently linked to women taking on more unpaid family responsibilities.


Further Reading:

ILO: Women in Business and Management: The Business Case for Change

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