Diverse and Competitive

The changing workforce

Women’s Persistent Pay Gap

A test of five explanations

When we hear about the gender pay gap, we often attribute it to discrimination in the labor market. However, the reasons behind the pay gap are more complex than simple gender discrimination. A recent study based on a sample of postsecondary students by Schweitzer, Lyons, Kuron and Ng, and published by Emerald Group Publishing, global publisher linking research and practice to society, offers five potential explanations for the persistent pay gap:

1. Women report lower core self-evaluations (i.e., self-efficacy and locus of control) than men. Women who have lower self-confidence or feel they have little personal control may accept poorer (than actual) job performance or negotiate lower salaries.

2. Women, in general, are more likely to prefer beta careers that emphasize family and society (feminine attributes), while men, in general, are more likely to prefer alpha careers that emphasize accomplishments, advancement, and prestige (masculine attributes). Feminine work, typically found in healthcare and social services, pay less than masculine work such as those in construction and manufacturing.

3. Women, aware of the glass ceiling, form less “equity beliefs” and adjust (lower) their pay expectations accordingly. Men, on the other hand, have heightened pay entitlement based on status characteristics and projections of self-competence, inflate their pay expectations.

4. Women rely on similar others, i.e., other women, as mentors and pay informants. Men also rely on similar others, i.e., other men who have greater access to power and influence as mentors and pay informants. Women also have lower perceptions of what others make, compared to men. This creates a self-perpetuating cycle in promoting the pay gap.

5. Women underinvest in their career capital (e.g., career choice, education levels, work experience) relative to men. Women take time off work for child-rearing responsibilities, which may render their career capital to depreciate. Men, on the other hand, are more likely to obtain advanced degrees and in STEM disciplines.

Not surprisingly, the study finds women prefer beta careers, want to work in healthcare or social services, have lower equity beliefs, rely on other women for pay information, form lower perceptions of what others make, and indicate they would take more time off work for child-rearing. Women, however, did not report lower self-efficacy or locus of control relative to men, perhaps indicative of greater assertiveness among young women today.

Women report lower initial pay expectations ($42,060) than men ($48,840), a 16% gap for women. Women also report lower peak pay expectations ($125,664) than men ($171,035), widening the gap to 27%. Initial pay gap was attributed to choice of work in healthcare and social services, and women’s perceptions of what others make. Peak pay gap was attributed to initial pay differences, beta careers, and again to perceptions of what others make. Interestingly, men enjoy a pay premium while women pay a penalty for preferring beta careers. Individuals must therefore change how they form pay expectations before entering the labor market.

This research is based on the article, "The gender gap in pre-career salary expectations: A test of five explanations" published in the journal, Career Development International.

Eddy Ng is F.C. Manning Chair in Economics and Business at Dalhousie University. He recently participated in a panel discussion on the pay gap on TVO’s The Agenda with Steve Paikin. Follow Ed on Twitter @profng

 

Eddy Ng, Ph.D., a professor at Dalhousie University, is the F.C. Manning Chair in Economics and Business.

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