Women’s Gains on the Labour Market: A Synthesis of Research

1. Women’s Gains on the Labour Market:A Synthesis of Research Carole Vincent CRDCN National Conference, Fredericton, October 24 2012

2. Context One of the most important social and economic developments during the last 40 years is women’s growing participation in the labour market. Participation rates of married women age 20 to 64 Source: Statistics Canada, Labour Force Survey

3. Context

4. Context Proportion of labour force with a university education

5. Context Gender wage ratio among workers age 25 to 54 Drolet (2011) Why has the gender wage gap narrowed?, Perspective on Labour and Income

6. cvincent.consultation@gmail.com 5 of 24 Context Gender wage ratio among full-time workers by age group Baker and Drolet (2010) A New View of the Male/Female Pay Gap, Canadian Public Policy

7. Synthesis of research: Objectives • Why is the gender wage gap declining but persisting in Canada? • How empirical studies using Canadian data are contributing to our understanding of this issue? • Which particular dimensions of the question have been addressed fairly well? • What are the main evidence gaps? • What are the policy implications?

8. Why are women’s gains on the labour market lower than men’s gains? Is it who they are? What they do? Or where they work? Erica L. Groshen (1991) The Structure of the Female/Male Wage Differential: Is it Who You Are, What You Do or Where You Work?, Journal of Human Resources “In most part: None of the above.”

9. A Gap Largely Unexplained • “In many dimensions, females increasingly hold an edge on males. As a result, if females commanded the same returns to (productive) characteristics as males, we would expect them to receive higher – not lower – wages than males.” Baker and Drolet (2010) A New View of the Male/Female Pay Gap, Canadian Public Policy

10. Decomposition of the Gender Log Wage Gap (Blinder-Oaxaca) Source: Multiple datasets * Explained by such characteristics as: educational attainment, tenure, occupation, industry, age, province of residence and marital status Baker and Drolet (2010) A New View of the Male/Female Pay Gap, Canadian Public Policy

11. … Even Among the Most Educated • “Les caractéristiques des femmes sont loin d’expliquer à elles seules leur situation. La part inexpliquée des écarts est beaucoup plus importante pour les hauts centiles que pour les bas centiles. Ceci témoigne des grandes difficultés qu’éprouvent les femmes pour accéder aux emplois bien rémunérés indépendamment de leurs caractéristiques personnelles et professionnelles.” Boudarbat and Connolly Pray (2011) L'écart salarial entre les sexes chez les nouveaux diplômés postsecondaires, HRSDC & CIRANO

12. Decomposition of the Gender Log Wage Gap at the Mean (Blinder-Oaxaca) Data source: National Graduates Survey * Explained by such characteristics as: educational attainment, field of study, multiple diplomas, employment status, over-qualification, tenure, occupation, industry, province of residence, marital status, immigrant status, disability, number and age of children Boudarbat and Connolly Pray (2011) L'écart salarial entre les sexes chez les nouveaux diplômés postsecondaires, HRSDC & CIRANO

13. Decomposition of the Gender Log Wage Gap by Centile (Blinder-Oaxaca) Data source: National Graduates Survey Boudarbat and Connolly Pray (2011) L'écart salarial entre les sexes chez les nouveaux diplômés postsecondaires, HRSDC & CIRANO

14. Possible explanations Women are over-represented in occupations or sectors of employment that pay less. The concentration of women in certain occupations – and within all occupations, in selected tasks – tends to limit their labour market success. • “Women continue to do women's work at women's wages. ” Armstrong and Armstrong (2010), The Double Ghetto: Canadian Women and Their Segregated Work About 2/3 of all employed women are working in education and health occupations, clerical or other administrative positions, or sales and service occupations. This compares with 30 % of employed men.

15. Possible explanations “What would the gender gap be if the female workforce was given the male occupational distribution?” • Occupational segregation could explain 20% of the pay gap • “The largest contribution to the gender wage gap in the 1990s came from the within-occupation classes component. […] By 1997/98, the within-occupation gender gap accounted for almost two-third of the gender wage gap.” Fortin and Huberman (2002), Occupational Gender Segregation and Women’s Wages in Canada: An Historical Perspective, CIRANO

16. Possible explanations Women attach higher value to nonfinancial job characteristics than do men. World Value Survey: Part of the gender gap may be based on preferences by women favouring jobs with lower pay but better working conditions Fortin (2005), Role Attitudes and the Labour Market Outcomes of Women across OECD countries, Oxford Review of Economic Policy and Fortin (2008), The Gender Wage Gap among Young Adults in the United States: The Importance of Money versus People, The Journal of Human Resources

17. Possible explanations Equality, Security and Community Survey & General Social Survey: Non-financial job characteristics may have large values, especially workplace trust and other measures of the quality of social capital in workplaces. • An increase of trust in management of one point on a scale of 1 to 10 has the same impact on life satisfaction as a 30% increase in income. • “Female workers attach income-equivalent life satisfaction values for trust in management that are twice as high as for male workers. […] Workplaces where trust in management is high are workplaces where flexible working arrangements are more likely to be in place and working smoothly.” Helliwell and Huang (2010), Well-Being and Trust in the Workplace, Journal of Happiness Studies

18. Possible explanations Women bear an unequal share of family responsibilities. Therefore, they seek occupational niches where hours are shorter or more flexible, or where working conditions allow for a better work-life balance. “It is not that women are willing to forgo pay because they enjoy flexible hours whilst men do not. Women are more likely to accept lower (hourly) wages if this is the only way they can combine the roles of mother and wage earner.”Report of the European Commission on gender segregation in the labour market, 2009

19. Time Spent on Unpaid Care of a Child, 2010 Data source: General Social Survey 2010 Statistics Canada (2011) Women in Canada: A Gender-Based Statistical Report

20. Possible explanations There is a penaltyassociated with having a child: Women who have ever had children earn less than women who have never had children. General Social Survey: This 'child penalty' or 'family gap' remains even when accounting for differences coming from: • mothers having more interruptions in paid employment – thus less tenure • mothers being more likely to see their human capital depreciating • mothers being more likely to return to work in another job or part-time • mothers being less productive at work because they are over-worked at home Phipps, Burton and Lethbridge (2001), In and out of the labour market: Long-term Income Consequences of child-related interruptions to women’s paid work, Canadian Journal of Economics

21. Possible explanations Gender stereotypes in organizational practices tend to penalize women. Compensation schemes tend to reward continued employment and long hours, a model more typical of male employment. • “Inequality in the workplace is probably rather subtle nowadays. It seems more likely that less obvious forms of discrimination have replaced the direct (or overt) discrimination that was common in the past.” Cooke and Zeytinoglu (2006) Females still face barriers to training, The Workplace Review

22. Possible explanations Workplace and Employee Survey: Male workers, whether or not in non-standard contracts, have relatively equal access to employer-sponsored training. • No the same for women: those in temporary contracts, whether full-time or part-time, are only one third as likely as permanent full-time workers to have access to employer-sponsored training. • “Some employers apparently perceive that females in non-standard contracts either do not need, or should not get, training. The net result is that females are further over-represented in “dead-end” jobs. This is an example of the statistical discrimination phenomenon.”Cooke and Zeytinoglu (2006) Females still face barriers to training, The Workplace Review

23. Possible explanations Access and Support to Education and Training Survey: Unequal access to training between gender. Hui (2012), The Relationship between Funding, Learning Objectives, and Choice of Program and Courses for Adult Learning, Social Research and Demonstration Corporation. Is it a reverse causality? Women tend to choose jobs that require less on-the-job training? It is unknown whether unequal access to training has an impact on pay.

24. How about the self-employed? There is an even bigger gap in self-employment income. Survey and Labour Income Dynamics: Liquidity constraints may contribute to this gap. Rybczynski (2009) Are liquidity constraints holding women back? An analysis of gender in self-employment earnings The Journal of Economic Asymmetries It is unclear however, whether this is due to discrimination among capital lenders.

25. Possible policy responses • Promote diversification of women’s educational and professional choices • Address the “glass ceiling” issue • Strengthen comparable worth and pay equity legislation • Strengthen work-life balance policies • Address issues of gender stereotypes in the workplace