Do women choose lower pay?

The gender wage gap explained

Marina Adshade 5 Premium content image
Do women choose lower pay?

(Photo: John Lamb/Getty)

A few years ago, I attended a graduation ceremony in which the award for academic achievement in every department in the faculty of science was awarded to a woman. At the time, I wondered: if the roles were reversed, would we not be wondering why one group was so over-represented at the top of the class?

The reality is such that, if you are under the age of 45, you have grown up in a time in which women have graduated from university at higher rates than men. In Canada today, for every 100 men under the age of 45 with a university degree, there are 127 university-educated women.

The principal reason for this educational divide: female students academically outperform male students at every level—high school and university.

So why is it, then, that women in this under-45 age group still earn, on average, only 78% of what men earn?

A new study by the American Association of University Women sheds some light on the gender wage gap by examining the earnings of men and women one year post-graduation. They found that even at the beginning of their careers women earn less than men—about 82¢ on the dollar, in fact.

Some of that pay gap can be explained by differences in college major, occupation and employment sector—but not all.

Within similar occupations, women earned consistently less than men. For example, in teaching, women earned 89%, business and management 86%, and in sales 77% of the salaries of men in the same occupation.

Compared to men working the same number of weekly hours, women earn less; 16% less when they worked 40 hours a week, and 18% less for those who worked 45 hours a week.

Even controlling for grade-point average, men earned more than women who graduated with identical levels of academic achievement.

This research indicates that the difference in earnings between a woman and man who both graduated from the same university and who, one year after graduation, both work the same field and have identical jobs (in terms of occupation, sector and hours) is about 7%.

There is a great deal of (justified) focus on that “unexplained” portion of the wage gap; the portion that results from, say, workplace discrimination or other factors that cannot be reliably measured in data. But in my mind, what this research tells us is that attention needs to be paid to the explained wage gap: the fact that women are frequently—and voluntarily—choosing jobs that pay less.

This means that if there is any hope of closing the gender wage gap, women must fundamentally change the way they plan their financial futures.

Female high-school students, for example, need to be encouraged to consider their future earning potential when choosing their university programs. Female university students need to be further encouraged to think the same way when pursuing their chosen occupation after they graduate.

The best thing for the Canadian economy is to have workers allocated to jobs where they are the most productive. If female workers are self-selecting themselves into careers in which they are underachieving on the wage scale, they cannot possibly be using their productivity to its full potential. On the other hand, if firms are not employing the most productive workers, they cannot possibly be maximizing their output.

A few years ago, a male graduate student told me that he would go work in the middle of a mosquito-infested swamp if that was the job that would guarantee him the best opportunity for a lucrative career down the road. Just this week, a female graduate student told me that post-graduation her only ambition for a job was one that gave her a feeling of personal satisfaction.

My point in sharing this story is this: very few people want to work in a mosquito-infested swamp, but it is unclear as to why pursuing lucrative occupations cannot also be personally satisfying—for both men and women alike.

Marina Adshade is a professor in the University of British Columbia’s department of economics

 

5 comments on “Do women choose lower pay?

  1. I do think times are changing and more women are taking a proactive role to get ahead in the workforce. It also depends on the industry. In some industries, women get paid a lot more than men.

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  2. I believe it is important to examine which fields of work are valorized in society over others and thus labelled “productive” or lucrative. Historically, in careers that were available to women, the salary was much less and when men began working in these fields, they were witness to the ‘feminization of the workforce.’ This has begun to be remedied in fields such as nursing and teaching. It is also important to consider the reason for seeking higher education and also the impact of lucrative fields upon societies and the planet we inhabit. For one, we must question, as stated by critic Chris Hedges, whether “education is [just] about training and ‘success,’ defined monetarily” or whether it is also about “learning to think critically and to challenge.” As he articulates, “we should not forget that one purpose of eduction is to make minds, not [solely] ‘careers’. A culture that does not grasp the vital interplay between morality and power, which mistakes management techniques for wisdom, which fails to understand that the measure of a civilization is its compassion, not its speed or ability to consume, condemns itself to death.”

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  3. As a gender expert and consultant in the field of women’s leadership and diversity working with some of the countries largest companies and most prominent non-profit and public sector organizations, I find the assumptions and conclusions drawn in this article, frankly, baffling, not-to-mention dangerous to for an audience unaware of the inaccuracies within the author’s conclusions.

    The issue regarding gender and pay differential has little to do with productivity and everything to do with pay equity, gender equality, and gender equity.

    To the author’s first point regarding graduates: while women may be graduating from post-secondary institutions in more numbers overall, I challenge the author to disaggregate this data by the level of degree earned. In doing so, it can be noted that while women graduate in greater numbers with undergraduate degrees, their numbers fall off as they reach the doctorate level, which can be correlated to age and childbearing/rearing. This has implications for both genders, their career choices and potential earning abilities.

    Second, when looking at the issue of gender and earning, the focal point should rest on the issue of equal pay for equal work, regardless of the job, industry and sector a woman or a man choose to work in (ie. regardless of sector, women are still underrepresented at senior and board levels). Women continue to earn less than men in most industries (and particularly in typically male-dominated industries) for several reasons. A few of note: 1) women are offered less for the same work due to gender discrimination and bias; 2) studies have demonstrated that women do not demonstrate the same negotiating skills as men and therefore negotiate lower salaries (note that, these are of course, generalizations); 3) women who leave their role temporarily to have children, will fall behind men working the same job and not taking paternity leave.

    While both young women and men should be educated on the realities of their potential future careers (from work-life balance to earning potential), their decisions on which career they choose should remain up to them with both job satisfaction and earning potential playing a role. Mentorship and leadership training programs through secondary and post-secondary schooling should support young people in learning how to negotiate salaries, choose the right career and challenge gender inequality (e.g. by supporting women in enhancing their negotiating skills and men in entering into female-dominated industries and roles)

    I’m baffled that the author correlates higher productivity to higher earning potential and lower productivity to higher job satisfaction. I’ve never seen a study that evidences this and it seems contrary to any study I’ve ever read regarding the direct correlation between productivity and job satisfaction.

    Ultimately, this article only serves to further disempower both genders with its arguments founded upon a paradigm that values financial “success” over all else (read: career satisfaction) without challenging the underpinnings of gender inequality and the gendered state of the workplace.

    Only when we begin to value roles typically associated with women (ie. nursing, teaching, childrearing) to the same degree as those associated with men, institute equal pay for equal work systematically, and change our ideas about childbearing and childcare as it relates to the workplace, will both men and women have the opportunity to earn decent wages, and choose the careers they know will maximize their personal satisfaction and quality of life.

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    • sg on, you are absolutely right! I was very concerned to see these conclusions in this article. It is the same old, same old – blame women for their plight. I am in my 60s, with several advanced degrees and I have seen it all. When I was in school, women were over represented at every level. But the men got all the good jobs on graduation. They also got hired while they were grad students, while the women had to make do with teaching assistant work. And we’re talking about people all in the same profession here. Same jobs, same education.

      People have been blaming women for as long as I can remember, for not having good jobs or being paid well. It was always, “Oh, she wanted to raise a family”, etc. Well, men have families, too. And they get paid like they are paying real bills for those families while women, generally, are not.

      The wage gap seems to have remained constant also, for as long as I can remember. Every generation has some explanation, but nothing ever gets done. And usually, it gets blamed on the women, as in this article. Very convenient. Excuses those with the power to remedy things from doing anything – how convenient for them!

      Women need to demand better pay for the jobs they are allowed to apply for these days.

      When I was a young women, there were three jobs open to you: nurse, secretary, or teacher. If you didn’t do one of these, you got to be a housewife. My parents wouldn’t allow me to go to University. I had to earn money at piddly jobs and pay my own way. I got through to a Ph.D programme that way. Show me the swamp! I’ll work in it!

      Younger women these days have no idea how bad discrimination used to be. If you want something, you have to get off your duff and do the work. No one else will demand equal pay for equal work but the women who want it. Nothing gets handed to you. Don’t palm me off with untrue excuses about this problem!

      Reply

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