Gender discrimination still exists in the workplace, but there are many reasons women earn less than men. And new research suggests women are more willing than men to trade pay for other benefits such as flexibility or job security, even before they enter the workforce.
Economists Matthew Wiswall of Arizona State University and Basit Zafar of the New York Federal Reserve surveyed nearly 250 students at New York University in 2012 to gauge how “high ability” individuals make decisions about jobs and careers. They presented a variety of scenarios to each student regarding hypothetical jobs and asked them to make tradeoffs involving starting pay, job security, probability of being fired, raises and other factors. Here’s where men and women differed the most.
Job security. Women are willing to give up 4% of pay for a lower probability of being fired; men, just 0.6%.
Availability of part-time hours. Women will give up 7.3% of pay for the option to work part-time; men, just 1.1%.
Fewer weekly hours. The distinction is slight, but women are willing to give up 1.3% of their pay for a shorter workweek, compared with 0.8% for men.
Higher earning potential. Men will give up 3.4% of their pay today for a job with higher annual pay raises in the future; women, just 0.6%.
In general, men care mostly about money while women care about a variety of factors. “Women are willing to give up higher earnings to obtain other job attributes,” the study’s authors conclude. This squares with other research showing that women often choose fields, such as teaching and healthcare, that are perceived to offer greater flexibility, even if it means lower pay.
Researchers have spent decades studying the gender pay gap, which remains in place even at the highest strata of the pay scale. Actress Robin Wright recently detailed the threats she had to make in order to earn the same pay as her “House of Cards” co-star, Kevin Spacey. The 2014 Sony Pictures hack revealed that other Hollywood women earned far less than their male peers.
At the other end of the pay scale, lower pay for women often hits working mothers struggling to put food on the table. Democratic presidential candidate Hillary Clinton wants Congress to pass a bill called the Paycheck Fairness Act that would allow the government to collect pay data from employers and strengthen penalties for companies that discriminate on pay.
Estimates of the shortfall in pay for women, compared with men, range from about 5% when adjusting for education, location, experience and other factors, to more than 20% when simply comparing median pay for men and women. The gap has narrowed since the 1970s, but the pace of improvement has slowed. And while discrimination is still a factor, researchers are increasingly trying to understand why women are underrepresented in high-paying fields such as technology and what women themselves can do to get paid more – without giving up the other things they value.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.