Gender wage inequality

A recent doctoral thesis examined the link between the gender composition of occupations and wage differences, testing the theory of devaluation which states that systematic devaluation of women’s work can explain the gender wage gap. Empirical findings confirm that the relation between occupational gender composition and occupational prestige is non-linear, but that women’s pay-off to prestige is lower, mainly due to unequal distribution of family obligations.

Charlotta Magnusson’s recent doctoral thesis from the Swedish Institute for Social Research (SOFI) at Stockholm University examined the link between the gender composition of occupations and wage differences.

Gender inequality in the labour market

Gender inequality manifested in lower wages for women compared to men is a global and frequently debated issue. The thesis had its starting-point in the so-called ‘theory of devaluation’, which states that the gender wage gap is due to the different valuation of men’s and women’s work.

The thesis is built on three different essays and this article reports on the first two: one investigating the link between occupational prestige and the perceived ‘gender’ of the occupation, and the other focusing on women’s pay-off to occupational prestige.

Most of the theories which try to explain the gender pay gap can be categorised as either ‘supply-side’ or ‘demand-side’ explanations.

The supply-side explanations focus on differences in human capital between the sexes and specifically the differences in terms of company-specific human capital. Company-specific human capital refers to skills achieved on the job, and the theory suggests that the gender inequalities observed in the labour market are mainly due to differences in individual investments in these skills. Because of the gender division of paid and unpaid work, where women tend do more unpaid work (such as taking care of children or cleaning), the lifetime participation rate of women in the labour market is generally lower than men’s. Consequently, women have a lower incentive to invest in company’s specific skills, since the expected return is based on future labour market participation.

The demand-side explanations look for causes of women’s discrimination in the labour market in its gendered organisation. In this view, companies and organisations are not gender-neutral institutions: cultural assumptions about men and women influence and arrange organisational rewards that determine the allocation of different positions to men and women within the organisational structure. Working 40 hours per week is usually not enough in an elite profession and the expected working time of 50–70 hours per week is only possible for workers with no obligations outside work. Due to their family obligations, women are seen as unable to live up to these expectations. These stereotypes of female employees as less committed to work than men depreciate their value as employees. In other words, while the supply-side theories argue that women de facto are less committed to work, the demand-side theories focus on the employers’ view of women as less committed.

This research examined differences in occupational characteristics as an explanation of women’s lower wages. In particular, it tested the theory of devaluation, which states that the disparities are due to a cultural devaluation of women’s work. Skills and working conditions associated with women are devaluated in comparison to jobs associated with men and this is, in turn, institutionalised in the wage-setting system. In order to test this theory, Magnusson analysed the relationship between occupational prestige and occupational ‘gender’ using Treiman’s Standard International Occupational Prestige Scale and data from the Swedish Level-of-Living Survey (LNU).

The Swedish case

The empirical analysis of the Swedish data reveals a non-linear relationship between the proportion of women in an occupation and occupational prestige. The share of female workers in an occupation does not seem to have any effect on the occupational prestige, and mixed occupations (41%–60% female) are shown to have the highest prestige. Since there is no relationship between occupational prestige and occupational gender composition, the predictions of the devaluation theory are contradicted. However, the analysis shows that women receive lower wage returns than men for attained prestige and that the gender wage gap is the largest among the most prestigious occupations.

Differences in pay-off to prestige are further evaluated in a separate analysis. Building on prior research that shows how family status affects the working life of men and women, the analysis examines whether the pay-off to prestige differs according to this variable. It also examines whether work characteristics which are difficult to combine with family duties (such as extensive overtime work) account for some of the gender wage gap in returns to occupational prestige.

The results show a significant negative effect for married/cohabitating women with children in terms of pay-off to prestige. The findings indicate that married/cohabitating mothers do not receive the same wage compensation for occupational prestige as married/cohabitating fathers and that this difference is mainly explained by work characteristics that are complicated to combine with family duties. The conclusion is that the unequal distribution of family obligations accounts for a substantial share of the gender wage gap in the pay-off to prestige.

Commentary

Even though the results presented in the doctoral thesis are new, the knowledge that there are different expectations of men and women in the labour market is not. This topic is common in Swedish gender equality debates and is one of the arguments in support of the controversial RUT-rebate (in Swedish) (subsidy for domestic services), suggesting that the subsidy could expand women’s ability to prioritise work over domestic work.

Magnusson shows that the connection between the share of women in a profession, the prestige of the profession and the wage received is not as linear as expected. Nevertheless, there is a clear difference in the labour market performance of men and women, especially in prestigious professions. This is to some extent explained by the demands on availability, travelling and long working hours in these professions, which are difficult to combine with family obligations.

Reference

Magnusson, C., Mind the gap: Essays on explanations of gender wage inequality, Stockholm, Swedish Institute for Social Research (SOFI), Stockholm University, 2010, available online at http://su.diva-portal.org/smash/record.jsf?searchId=1&pid=diva2:284166.

Mats Kullander and Carl Gahnberg, Oxford Research

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