The causes of wage inequalities between men and women with a focus on trends of female participation rates in the labor market

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Inequality refers to an unfair situation in society where people are treated unfairly based on the differences in income, occupations, wealth, race, nationality, gender, knowledge, abilities, and so on. Inequality is very prominent among male and female. There are many causes that cause inequality between men and women in labor market, such as: differences  on ability (intelligence, strength, dexterity,. etc); differences on  attitudes ( adventurous, risk-taker, cautions,. etc), differences  on qualifications,  household composition  and differences on wages. The wage inequality between the genders is also known as the gender pay gap. The gender pay gap is the difference between men’s and women’s pay based on the average differences in gross hourly earnings of all employees (European Commission). It occurs all over the world and it varies from country to country. The extent of wage gap depends on the position of men and women taken as reference but also due to many other factors which are mentioned later on.

 Earning women less than men over their lifetime, results in lower pension rates for women and this consequently increases the likelihood of poverty in the old age. Due to the increasing rates in the last decades of females participation in the labor force market, the gender pay gap has narrowed down.

Based on the EU Commission (2014) and Sloman (2010), the gender pay gap is caused by many possible factors such as:

Physical strength: Naturally, women and men are likely to differ in their physical strength which as a result might impact the marginal productivity.

Social Norms: Depending on social norms, men are considered as the ‘bread winners’ in one family and this is why a man’s job might be given as more important than a woman’s job.

Trade Unions: Proportionally, there are less female members than male members in trade unions which consequently mean that the willingness and power to fight for women’s rights and to represent their interests in the labor market is lower relative to men’s.

Prejudice- In many jobs women are discriminated, and are not promoted. This happens because of social and cultural factors. In some countries a woman cannot have a high position (like a senior), because the mentality and culture in that country which cannot except to employ a woman on a high position.

Discrimination: Discrimination occurs due to many factors – it might occur due to cultural customs, individual customs, opinions, prejudice etc. and in many forms such as: under evaluating women’s tasks and competences (likely to happen in occupations where they are in majority) because they are considered to reflect a ‘female’ characteristic than a skill or competency; under-representation of woman in senior positions, politics, boards etc.; traditions and gender roles in society from the very early age; discrimination in the work place by giving women lower wages even by  getting the same work done as men.

Balancing work and family: While men very rare do take parental leave or take responsibility of household chore. In such conditions, women have to find a way in balancing work and family responsibility. Many women manage by working part-time so as to feed their family. The parental leave next to the part-time working hours are solutions which women use to combine their paid work  This way they manage their work with family responsibilities which consequently can be considered as a barrier to progress in their career and thus to receive higher income.

Comparing statistics data form twenty years ago shows that the inequality between men and women has been significant decreased. The women participation in the labor market increased significantly from 1980-2008 (50.2% to 51.7% – International Labor Office 2010) which according to Sloman derived from the significant change of the shift from agricultural and manufacturing sector to service sector. A major indicator of that led to an increase in women’s participation in labor market is the part-time work. Working part-time is an opportunity for women for flexible hours of work and for combining wage work with family commitments According to the European Union, men in the EU work seven hours more than women in a week. Reasons for not undertaking full-time jobs might be lack of care services for children but also low financial incentives of second earners to undertake a full-time job. There are some other major factors that have contributed in women’s participation on labor market, such as: changes in cultural attitudes towards work (especially in countries where participation is traditionally lower due to the culture), demographic factors, changes in the female population (e.g. fertility decisions both in terms of the number of children and age at which having the first child) and educational choices (women are now more educated).  There are also some pertinent factors that contributed to women’s participation in labor market, including reforms of the welfare state and also changes of labor market institutions and policies specifically targeted at groups with lower attachment to the labor market.

Closing the gender pay gap would be in general beneficial for the economy and society as the whole. It helps in reducing poverty, providing quality jobs while building a positive working environment, unlocking under-utilized skills of women while handling skills shortages in the labor market etc. Since it is quite beneficial for workers, businesses and the whole economy, many countries have introduced strategies to close the gender pay gap in form of provisions, regulations, specific actions in favor of women etc. (EU Commission, 2014).

References

 Sloman J. & Garrat D.(2010). ”Essentials of Economics (5th)”.

International Labor Office (2010): Women in labor markets – Measuring progress and identifying challenges.

http://www.ilo.org/wcmsp5/groups/public/—ed_emp/—emp_elm/—trends/documents/publication/wcms_123835.pdf, accessed on: 27/06/2018.

Report about gender pay gap by the EU Commission (2014):

http://ec.europa.eu/justice/gender-equality/files/gender_pay_gap/140319_gpg_en.pdf, accessed on: 01/07/2018.

World Economic forum- Report: “The Global Gender Gap Report 2014”:

http://www.ituc-csi.org/IMG/pdf/gap-1.pdf, accessed on: 28/06/2018.

World Bank: Statistics about female participation in the labor market.

http://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS, accessed on: 01/07/2018.

 

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