WCW's Women Change Worlds Blog

As a new mother, you hold your baby in your arms, wishing for the best of the best for her. You may also be facing difficult career questions upon her arrival: When should you start working again? Should you be a stay-at-home-mom? Should you get a new job with a more flexible schedule? Will you be able to get promoted when you’re back at work? If you have a daughter, will she face the same choices in the future?

When it comes to ensuring that women are able to maintain careers while having children, some progress has been made at the national level, including the Equal Pay Act of 1963 that enforces equal pay for equal work and the Family and Medical Leave Act of 1993 that requires covered employers to provide employees with unpaid leave for qualified medical and family reasons. However, these laws are not nearly enough to eradicate gender inequality in the workplace or the gender wage gap.

Today is Equal Pay Day, a symbolic occasion that raises awareness about the wage gap. The date represents how far into the year U.S. women must work to earn what men earned in the previous year. This year, Equal Pay Day is August 3 for black women, September 8 for Native American women, and October 21 for Latina women. While many factors contribute to the gender wage gap, two significant factors are the “sorting problem” — overrepresentation of women in low-wage industries and occupations — and gender roles at home.

Despite the fact that in recent years, the percentage of women 25 and older who have at least a bachelor’s degree is higher than the percentage of men, longstanding gender biases cause women to cluster in certain college majors. Women are still scarce in majors related to science, technology, engineering, and math (STEM), a gateway to high-paying jobs. Thus, they are automatically “sorted” into relatively low-paying industries even before starting their careers.

However, even if women follow a career path in a well-paying industry and position, research shows that male and female college grads who start their careers earning similar salaries end up with a substantial gap. Gender roles, especially the fact that women are often primary caregivers for children, are the biggest culprit. Some women choose to be stay-at-home moms, some switch to more flexible or part-time positions, and others just cannot keep up with the demands of their jobs enough to be promoted. Hence, the gap widens.

The economic effects of the COVID-19 crisis have brought out the worst of the consequences of the sorting problem and gender roles. First, industries like hospitality and retail, which are dominated by women, have been hit the hardest. Second, mothers have been especially vulnerable due to the lack of childcare and increased home responsibilities such as homeschooling. Now many are calling this crisis a “she-cession,” and the burden is not only financial but also psychological.

These effects could have been less severe if policies were in place to fix systemic gender inequalities. The pandemic has revealed the urgency of implementing actionable and effective policies that will set us on a path toward a gender-equitable recovery as well as a gender-equitable future.

For example, we need policies that promote an education system free of gender bias, in which girls are encouraged to pursue careers in STEM fields. We need to invest in affordable child care and flexible work schedules for all. And we need to design optimum paid parental leave policies that help parents to achieve a more manageable work-family balance and improve the labor market outcomes of women as well as the health and wellbeing of both children and mothers, while incentivizing firms to promote equality in the workplace.

At WCW, my research focuses on understanding the impacts of current paid leave laws in the U.S. Unfortunately, the U.S. is the only developed country with no federal paid family leave. However, there are some states with job-protected paid leave laws and some others with legislation underway. Research to date on the effects of these laws is limited and based mostly on California data since it was the first state to enact such a law, in 2004. Some studies based on California data show that it has a positive impact on employment and wages of new mothers, especially in the short run, while others find contradictory evidence in the long run.

Clearly, we need further research. Our research with the Longitudinal Business Database and the Longitudinal Employer-Household Dynamics database, linked to the 2000 Census and American Community Surveys (2005-2017), is more comprehensive than previous studies and will broaden our knowledge to design better policies as it includes New Jersey and Rhode Island data and looks at employee-employer relationships.

It will take time to change social norms and prejudices, and to eliminate gender discrimination that is engraved in our social fabric. But as we pursue research that shows us which policies can help, we advance gender equality, social justice, and human wellbeing. Equal Pay Day reminds us that we must keep fighting this fight, in order to create a better future for our children.

Deniz Çivril, Ph.D., is a research scientist at the Wellesley Centers for Women at Wellesley College and Special-Sworn-Status researcher at the U.S. Census Bureau. Her research interests center on labor economics, international trade, and corporate finance. Her current projects at WCW focus on women in the workplace.

A woman graduates from college and starts her first job, earning about the same as the male colleague who sits next to her. She gets promoted a few times, her salary increases, and in her late 20s, she gets married. Her husband gets a job offer in a new city, they move, and she takes a slightly lower-paying job. In her early 30s, she has a baby, and then another baby in her mid-30s. She decides to cut back her hours (and thus her pay) in order to spend more time with her children. My research shows that this is the point in women’s lives at which the gender pay gap widens.

Fast-forward 15 years: the woman’s children are growing up and will soon be headed off to college, and she is eager to ramp her career back up. What happens to the gender pay gap now?

Today is Equal Pay Day, a day that symbolizes how far into the year the average woman in the U.S. must work in order to earn what the average man in the U.S. earned the previous year. Equal Pay Day for black women is August 13, for Native American women it’s October 1, and for Latina women it’s October 29. Women on average earn $0.82 for each dollar earned by a man; black women earn $0.62, Native American women earn $0.57, and Latina women earn $0.54. The gender pay gap has slowly narrowed over time, but hasn’t budged much over the past 15 years. Globally, the gap isn’t expected to close for another 257 years.

But we are learning that the story of the gender pay gap is a complex one. We now know that male and female college grads start their careers earning nearly the same salaries, but end up with a substantial gap by age 45. By the time college grads reach their peak earnings, men earn on average 55 percent more than women. Less than a third of this gap is caused by differences between the jobs in which men and women work, though women are certainly overrepresented in lower-paying sectors and occupations such as teaching, nursing, and social work — the usual “pink-collar” jobs. Much of the widening of the gap comes from married women: their earnings grow much more slowly with age and they see little benefit from job-hopping compared with men and unmarried women. And when women become mothers, they are more likely to move into part-time positions, take time off, and work fewer hours than men, even in full-time work.

This paints a bit of a dire picture. Things begin to turn around for women, though, once they reach their late 40s and 50s: the pay gap begins to narrow again. For example, among more recent generations of college-educated women, the gap starts shrinking when they reach their late 50s. This happens as women increase their work effort relative to men once their children leave home.

There are still more questions to be answered before we can fully understand the causes of the gender pay gap, and how policies might help close it. For example, how much of the gap is contributed by dual-career considerations, where a family has to optimize around the primary breadwinner? Can public policies help to better share the burden among working spouses? An improved understanding might help us determine whether policies such as father quotas in parental leave might be part of a solution.

We are slowly gaining a clearer picture of how the gender pay gap evolves over the course of our lives. As our research continues, this picture continues to come into focus.

Sari Pekkala Kerr, Ph.D., is a senior research scientist and economist at the Wellesley Centers for Women. Her studies and teaching focus on the economics of labor markets, education, and families.

We all have heard it, women earn about 20 percent less than men. But when, how, and why does the gap emerge? Everyone has an opinion on it, and these opinions range widely – which leads to many frustrating public opinion exchanges. Are we eternally stuck in a rut arguing about what the relevant facts are? Or could administrative “big data” shed some new light here and help move us forward? We think so…

Two new studies find that college grads start their career with a tiny gender earnings gap, but end up with a substantial gap by age 45. What are women doing wrong, or men doing right, for this to happen? This seems to be a story about “career acrobatics”, one with chutes and ladders. First, it turns out that the gap widens both in existing jobs as men climb the career ladders faster and higher within firms, and through job changes since men disproportionately move across firms to higher paying ones as they age. By the time college grads reach their peak earnings, men earn on average 55 percent more than women.

What could possibly account for such enormous earnings gaps during the first 20 years of working life? Not surprisingly for anyone, a chunk of the initial gap and its subsequent growth comes from differences between men and women in terms of the sectors and occupations in which they work. Women are definitely over-represented in lower paying sectors and occupations. The best-known examples include teachers, nurses, occupational therapists, and social workers. Many commentators argue that women themselves are responsible for pay gaps as they choose careers where starting salary is low and salary growth modest with work experience and seniority. In reality, the reasons why women congregate in these occupations are complex, and addressing occupational gender differences requires societal changes. More importantly for the debate though, women are not “causing” the earnings gap with their “bad choices” – occupational segregation accounts for no more than a third of the overall earning gap. Something else is at work.

Another expensive “choice” women make is motherhood. Women are more likely to move into part-time positions, take time off after having children and work fewer hours than men – even in full-time work. How much of that 55 percent gap does motherhood explain? Unfortunately our data does not give a direct answer to that, but arguably all of these factors contribute to the growing earnings gap between ages 25 and 45. What we can say though is that much of the widening of the earnings gap comes from married women: their earnings grow much more slowly with age and they see little benefit from job hopping compared with men and unmarried women. Why are they not able to capitalize on their college degree like others even by switching jobs? This may be related to a phenomenon called “tied migration.” Family makes their location decision based on the “primary career”, which usually is that of the husband. This is why job moves tend to only benefit that primary career and could even hurt the secondary career. Ironically, the primary career is typically chosen to be the one with greater earnings potential – bringing us right back to the gender pay gap conundrum. This begins to look like a self-reinforcing cycle.

Career choices that look “less than optimal” in terms of long-run earnings growth may also be explained by college educated women consciously moving to lower-paying firms (within a given industry) in anticipation of needing more time flexibility when children enter the picture. Similarly, the gender earnings gap is largest in sectors, such as financial, insurance, and real estate (FIRE), that are more unforgiving of career interruptions and shorter or more flexible work hours. At age 25-27, female college grads working in FIRE earn almost exactly as much as male college grads. However, already by age 30-32 men earn about 35 percent more. In this sector men are able to obtain greater career advancements within a given firm, but a sizeable chunk of the earnings gap is due to women’s disproportionate shift into lower-paying firms by age 34.

We promised that these data could help shed some new light, but there are still many questions in making sense of the patterns. For one, what happens to the career and earnings dynamics within households as the family composition changes? Time-use studies say that the arrival of children makes spouses specialize more: one parent focuses on work while the other takes more responsibility at home, often balancing a job in the mix. It is easy to guess how this specialization usually goes, but might the dynamics look different if it was the father rather than the mother who takes a career break? Answers to those questions can clarify policy recommendations. For example, would a Swedish-style shared parental leave policy reduce gender earnings gaps or do we need a more wholesale approach to workplace organization? The latter approach would include reducing the earnings and career cost of temporal flexibility, making a work-family balance easier for both moms and dads, and reduce the need to designate a “default parent” who takes over the majority of household and child-related responsibilities.

Sari Pekkala Kerr, Ph.D., is a senior research scientist/economist at the Wellesley Centers for Women at Wellesley College. Her work described above is based on the research she conducted with Erling Barth, Claudia Goldin, and Claudia Olivetti.