Giving Compass’ Take:
• Esteban Ortiz-Ospina examines the realities hidden in gender wage gap data from around the world, revealing patterns.
• How can donors use this information to guide their giving? What does the loss of wages mean for women?
• Read about the cost of gender inequality globally.
- The gender pay gap measures inequality but not necessarily discrimination: Discrimination in hiring practices can exist in the absence of pay gaps. Similarly, it is possible to observe large pay gaps in the absences of discrimination in hiring practices. The implication is that observing differences in pay between men and women is neither necessary nor sufficient to prove discrimination in the workplace. Both discrimination and inequality are important. But they are not one and the same.
- In most countries there is a substantial gender pay gap: In most countries the gap is positive – women earn less than men; and there are large differences in the size of this gap across countries.
- In most countries the gender pay gap has decreased in the last couple of decades: In most countries with available data, the gender pay gap has decreased in the last couple of decades.
- The gender pay gap is larger for older workers: The gap is a statistic that changes during the life of a worker. In most rich countries, it’s small when formal education ends and employment begins, and it increases with age. As we discuss in our analysis of the determinants, the gender pay gap tends to increase when women marry and when/if they have children.
- Women in rich countries tend to be overrepresented in the bottom of the income distribution – and underrepresented at the top: This is also crucial to understand the pay gap: occupational choice is a key contributor to the observed inequalities.
- The gender pay gap is smaller in middle-income countries – which tend to be countries with low labor force participation of women: The fact that middle-income countries have low gender wage gaps is, to a large extent, the result of selection of women into employment. Olivetti and Petrongolo (2008)3 explain it as follows: “if women who are employed tend to have relatively high‐wage characteristics, low female employment rates may become consistent with low gender wage gaps simply because low‐wage women would not feature in the observed wage distribution.”
Read more about the gender pay gap by Esteban Ortiz-Ospina at Our World in Data.
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