Jim Rose: The gender pay gap is driven by work-life balance

The tiny gender pay gap at the bottom and in the middle is driven by more women working 9-to-5 in jobs that are not ...

The tiny gender pay gap at the bottom and in the middle is driven by more women working 9-to-5 in jobs that are not unpleasant or risky

OPINION: There is next to no gender pay gap but there is a gender earnings gap at the top end of the labour market because professional women prioritise work-life balance.

The gender pay gap for the top 10 per cent of women working fulltime has been about 18 per cent for 20 years (see graphic). The gender wage gap for most others rounds down to zero; 2 per cent at the bottom of the job market; 6 per cent in the middle.

The tiny gender pay gap at the bottom and in the middle is driven by more women working 9-to-5 in jobs that are not unpleasant or risky and have a convenient commuting distance given school runs.

The gender pay gap is far larger for professional women because they want and can have the best of both worlds; they pursue a good career but leave plenty of time for their family. These professional women are paid the same as men in individual jobs but earn less over their careers because fewer take on careers that require long, exhausting hours with little work-life balance to get ahead.

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Top American economist Claudia Goldin found that some careers severely penalise any time off or working less than punishingly long or rigid hours. But Goldin also found that the gender wage gap for female MBA graduates disappears if their partner earns less than them. These women earn as much as men do on an hourly basis but work fewer hours per week. They have no gender wage gap, which is measured in hourly pay, but will earn less over their career because they work fewer hours.

Most couples have an age difference. Unless the researcher knows which is older and further up their career track, decisive information is missing because power couples make canny choices about which invests more in their career. None of that information is available in New Zealand data.


Early work on the gender wage gap in the 1970s found that the number and spacing of children's births was a major driver of the pay gap. But none of this is known to sexist employers so that they discriminate more against mothers with more children or who have children widely spaced apart.

The gender earnings gap is driven by the sophisticated choices women make about family and career. The number of women in graduate studies exploded in around 1970 when reliable contraception became available to unmarried women. This allowed them to pursue a long duration professional education but not be caught short by an unplanned pregnancy. Women major in those degrees whose skills depreciate at a slower pace when there are career breaks for motherhood.

Science, IT and engineering degrees are less popular among women because more interactive careers such as law or medicine take advantage of their vastly superior reading skills. There are trivial differences between 15-year-old boys and girls in maths and science but reading scores as measured by the OECD give girls an edge that is the equivalent of 6 to 12 months more schooling. Young women who want to be the best they can be choose those professions and careers that make the most of their vastly superior reading and verbal skills.

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We live in an era of identity politics where people can choose to be whatever they like; a choice that must be respected without question except for one. When women choose to have both a career and a family, that choice is not seen by some as freely made. In professions where women earn less than men, it is because these women choose work-life balance over a rat race that may make them strangers to their children.

You do not have to read that many biographies of successful businessmen and top male executives to know how estranged they often are from their children.

Jim Rose is an economic consultant in Wellington.

 - The Dominion Post


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