Over the past several weeks, I hope you have learned something about the gender pay gap. Forty years ago, women made 60 percent of what men made. Today, that number is 80 percent. Although woefully short of equality, that is progress. This progress was driven by several forces. By a decreased need for women to work in the home. By a change in the attitudes of both men and women towards women working. And also by changes in the ability of women to plan when they had a family.
The resultant increase in experience and education meant that women spent much of the time period between 1975 and 2000 catching up to men in terms of earnings. That’s nice. Except now it’s 2019. In the year 2000, there was no Facebook, CDs were still a thing, cell phones were just phones, and the gender pay gap was 80 percent. Today, only one of those things is still true. I’ll let you guess which one.
So, what stopped the progress? A lot of the remaining gender pay gap has to do with the fact that women still hold a disproportionate level of caregiving responsibility. Because of this fact, women accept jobs with more flexibility and lower pay, and they exit the labor force more often than men, accumulating less experience. Perhaps for these same reasons, women face statistical discrimination from employers that likely results in lower pay.
The figure below summarizes this stalled progress. The red line shows the gender makeup of the highest paying 20 percent of all occupations. If things were equal, these occupations would be split fifty-fifty. In the 1970s, the number was 10 percent, it crossed 20 percent in the early 1980s, and 30 percent in the early 1990s. But, we’re still waiting for it to cross 40 percent. The black lines shows the gender wage gap. It sits at the now familiar 80 percent…kind of like it did in the year 2000, when I was in high school. If you had told me back in 2000 that in 2019 I’d be writing a blog about how the gender wage gap is still 80 percent, I would have said “What’s a Blog” and “Why aren’t I a professional golfer.” Ouch.
Figure 1. Share of Women in High Paying Occupations and the Gender Wage Gap, 1975-2017
The question is: what can we do?
Policy to Deal with the Wage Gap
I want to talk about two ways to reduce the gender wage gap. One is commonly discussed: paid leave. The second is less often discussed: an extended school day and year.
Is Paid Leave the Answer?
One of the most common solutions suggested to reduce the gender pay gap is to require employers to offer paid maternal leave. The U.S. is one of the few countries without mandatory paid leave for moms. The logic is that if employers had to offer paid maternal leave, women would take the paid time but then come back to work. Women would end up losing less time in the labor force when children arrive. Thus, the policy would increase women’s wages relative to men’s.
Of course, by now you can probably think through the flip side – women may also end up being more likely to take leave than before. Employers could end up statistically discriminating against women thinking that all women will take more time off. In this case, paid maternal leave could have the opposite effect, increasing the gender wage gap.
Perhaps not surprisingly, a recent review of the economic literature on the effect of maternal leave on the gender wage gap found little effect. The positive and negative effects balance out. This finding does not mean that paid maternal leave would not improve people’s lives. It probably would, especially for low-income mothers who can little afford unpaid time off. But, it is also unlikely to reduce the gender wage gap.
What about adding paid paternal leave also? That policy offers both genders the opportunity to take paid time off. Except, even when paid leave is available to men, they take it much less than women. For example, a study of California’s paid leave policy found that when paid leave was made available to both genders women extended their time off by three times more than men. So, paid paternal leave probably is also not the solution to this particular problem unless men’s attitudes change. I’m not a psychologist, but my wife is and she assures me men ain’t changing, at least in the short-run. OK, back to the drawing board.
How About More School?
The problem is simple. Given the way our society is structured, someone has to take time off when children arrive. Universal public schooling does not start until age 5. Even once school starts, it only goes until 3pm. Plus, school is not in session the entire year. And, let’s not forget that pre-school and summer care options are prohibitively costly for many middle-and lower-income families. This structure means that one parent is going to have to take time off when kids are young and have flexible employment even when kids are older. As you know, that person tends to be the woman. But our society is structured this way by choice, which means we can change it.
A logical solution is to offer free public preschool to all students (it could be voluntary if parents would rather keep young kids at home). We could also extend the provision of primary and secondary school to 5 o’clock. Finally, we could offer either year-round school or at least voluntary, free summer school. In this scenario, mothers would not need to take as much time off when children are pre-school age. Women would also not require as much flexibility when their kids are school age. And, summers would not pose logistical or monetary nightmares.
Women’s experience would likely rise and flexibility would be less required. Plus, employers would begin to view the likelihood that men and women would take time off as roughly the same, lessening discrimination. After all, both parents would face an equally unconstrained existence with respect to kids during the workday. The additional pre-school, after school, and summer school options could be voluntary if parents want to provide their own care.
Would these policies be costly? In the short-term, yes, although it would also create education-related jobs squarely in the middle class – a group you have learned is suffering. And, at least this policy takes advantage of an existing infrastructure — the public school system. Plus, in the longer-term, it could have benefits that extend well-beyond the gender wage gap, by giving kids access to better learning opportunities when young. But that issue is for later in the blog when we discuss equality of opportunity. For now, it is just worth noting that lessening the gender wage gap may require more than paid leave — it may require changing the structure of school.
The last few weeks of this blog on the gender wage gap have provided both good and bad news. I am an economist, and I like to start with the bad news. Since 2000, women’s progress towards men’s earnings has been basically zero. That mean’s we’ve spent the 19 years since Britney Spears sang “Oops I Did It Again,” going nowhere. Yeah. And what a song.
The good news from the last few weeks is that women are earning more overall and more relative to men than back in the 1970s. Given that men have seen their earnings stall, this change has the potential to mitigate some of the damage. After all, the very men who have seen their earnings drop could be marrying women who are working more and earning more. That would be great. Unfortunately, that happy story is not what has happened. In 2020, we’ll look into that unhappy story. Until then, know that women have stalled out and that it may require some structural changes to get the gender pay gap closed.