We often hear that women earn approximately 77 cents for every dollar men earn. That statistic comes from data in the 2010 American Community Survey, an annual survey conducted by the U.S. Census Bureau. The statistic means that if you calculate the median annual income for all men and women who work full-time for an entire year, you would see that the annual median income for women is 77% of the annual median income for men.
Pay disparity persists
Different organizations offer variations of the statistic and look at weekly and hourly earnings instead of annual pay. The U.S. Bureau of Labor Statistics (BLS) and the Organization for Economic Cooperation and Development estimate that for weekly earnings, women who work full-time make approximately 83% of what men make. The Pew Research Center includes data on part-time workers and estimates that for hourly wages, women make 84% of what men do. Regardless of the exact number, there is agreement that a gender pay gap exists despite the fact that women now graduate from college in larger numbers than men and make up half, or almost half, of the students in medical, law, dental, business, and pharmacy schools.
The theory that women select lower-paying occupations fails to tell the full story. Even when you isolate data from certain occupations, a gender pay gap exists. For instance, in a field historically dominated by women, female middle school teachers make 91% of what their male counterparts make.
Do discrimination and different styles of salary negotiations account for the rest of the pay gap? While those factors likely play a role, data suggest they fail to account for everything. Research by Harvard economist Claudia Goldin suggests that caregiving responsibilities and temporal flexibility (the degree to which employees’ schedules are malleable) are crucial to understanding the gender wage gap.
Goldin’s research focuses on how time away from the workforce and the number of hours worked in a given time frame affect hourly earnings. She has presented evidence that those factors can have a large impact on a woman’s hourly earnings, depending on which industry she works in. For instance, working fewer hours per week has less of an impact on a woman’s hourly earnings if she works as a pharmacist or in the technology industry than if she works as an attorney or in the finance industry. There is almost no penalty on hourly earnings for part-time work in the pharmacy industry, and there is less of a penalty in the technology industry than in fields like law and finance.
While women have made strides in the workforce over the past few decades, they still perform more housework and have more childcare duties than men. Moreover, women with children work 24% fewer hours per week than men and women with no children. Goldin’s research shows that within the legal and corporate world, women with no caregiving responsibilities were compensated almost on par with their male counterparts. It is only when women take on responsibilities outside of work and desire greater temporal flexibility that the hourly pay disparity increases sharply.
Interchangeability of hours is key
Overall, the gender pay gap is much smaller in industries like pharmacy and technology than in fields like law and finance. Goldin theorizes that pharmacy and technology jobs have smaller pay gaps because employees are able to seamlessly perform other workers’ tasks. At a law or finance office, clients might prefer specific attorneys or associates, making employees less interchangeable and their availability and routine schedules more valuable.
Based on her research, Goldin believes that finding ways to accommodate flexible work schedules without penalizing workers’ hourly earnings will help reduce the gender pay gap. Furthermore, offering paid paternity leave may help facilitate equal sharing of childcare duties between working mothers and fathers so that the desire for flexibility is equally shared between men and women.