Closing the Gender Pay Gap
Closing the Gender Pay Gap
Men earn more overall, but we're close to equal pay for equal work
The gender pay gap is a perennial topic of discussion and debate, and a common source of misunderstandings. In this post, I’d like to share two fascinating graphs I came across recently in a report from Payscale, titled the “2024 Gender Pay Gap Report.” The graphs shed a lot of light on the nature and causes of the gender pay gap, and how it’s been changing over time. Both are based on U.S. data, but the general trends apply beyond the U.S.
The first graph shows the gender pay gap from 2015 to 2024, expressed in terms of how much women earn for every dollar men do. The blue line shows the uncontrolled gap, which is based on the median salary for all men and women. The red line shows the controlled gap, which is the gap that remains after accounting for sex differences in pay-relevant variables such as education, occupation, industry, job level, experience, and hours worked. The uncontrolled gap is the raw difference in the earnings of men vs. women; the controlled gap is an estimate of the extent to which we’ve achieved equal pay for equal work.
The two key findings depicted in the graph are, first, that both the uncontrolled and controlled gender pay gaps have shrunk over the last decade, and second, that although men still earn more than women on average, we’ve come surprisingly close to achieving equal pay for equal work. Women in the U.S. now earn 99 cents for every dollar that men earn, all else being equal.
This doesn’t necessarily mean that the uncontrolled gap isn’t a problem. That ultimately hinges on why men tend to go into higher-paying professions, work longer hours, and so on, and whether the reasons are just or unjust - whether, for instance, it’s a matter of personal preferences or of women being prevented from making the same choices as men. Still, the findings do imply that one long-standing problem - unequal pay for equal work - has almost been defeated.
The second graph shows the gender pay gap for parents (top bars) and non-parents (bottom bars). Again, blue represents the uncontrolled gap, whereas red represents the controlled one.
Both the uncontrolled and the controlled gaps are larger for parents than non-parents, but the difference is particularly large for the uncontrolled gap - the gap that includes job level, hours worked, and the like. Interestingly, there’s no controlled gap for people who don’t have children; a controlled gap is found only for parents. These findings are consistent with the idea, which I wrote about in this post, that in the developed world, the gender earnings gap is largely due to motherhood.
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