The Gender Pay Gap: Are Kids the “Culprit”?

Women make up nearly half of the U.S. labor force, but on average they still only earn about three-quarters as much as men do. Why?Professor Claudia Goldin, the first woman to earn tenure in Harvard’s economics department, has done research that delves deeply into this question.  She acknowledges that discrimination and women’s reluctance to aggressively compete and bargain continue to be factors in this gender pay gap.  But, she’s found, there may be an even more fundamental—and structural— reason for the disparity in women’s and men’s pay:  the widespread practice among employers of rewarding people more handsomely for working long and inflexible  hours—a practice that cuts against to working women with children.

balanceGoldin’s research shows that in their first jobs, young women are often paid as well as men.  However, after about five years, a gap appears and continues to increase as women grow older.  The culprit: the children these women have borne and raised.  Women with children work 24% fewer hours than women without children.  In fact, the gap between men’s and women’s pay is small or even sometimes non-existent as long as women don’t have children.

For example, Goldin found, when she examined University of Chicago MBA graduates, that the earnings of women were nearly identical to men’s at the start of their careers.  But, after five years, a significant gap in pay began to show up, and after 10 to 16 years, women earned 55% of what men earned. Children were the main reason.A 2007 report by the American Association of University Women had similar findings.  One year after college, the women the AAUW studied were paid 80% of what men were paid.  Ten years after graduation, women were paid only 69% of what men were paid.In another study, Goldin found that limited or flexible hours are the main reason why women are drawn to some occupations but not others.  For example, 77% of veterinary school graduates are now women.  Goldin points out that the demands of their professional training haven’t changed but the demands of their practice  have.  Small animal clinics are typically open from  9 a.m. to 6 p.m., six days a week, but they have no evening or emergency hours.  25% of all recent University of Chicago MBAs are women, but only 8% work in venture capital firms, which are notorious for expecting their employees to put in long hours.  Although 41% of young medical doctors are women, not many become cardiologists or surgeons; rather, they go into less time-consuming (and often less remunerative) specialties like public health, pediatrics, dermatology, psychiatry, immunology and OBGYN.In many cases, Goldin says, women have chosen these careers because they wish to combine having a career with having a family, and these jobs allow them to control their hours.  “Women are trading pay to get workplace flexibility and are drawn to professions where it’s easier to do that.”So what will allow women to attain pay equity with men,. rise to the highest levels in their professions, and at the same time have children and nurture their families?Part of the answer, I think, is a shift in our culture.  American employers need to start assessing performance and basing compensation far more on the quality of people’s work and far less on how many extra hours people are willing to put into their jobs.Another part of the answer is government and corporate policies that promote a healthy work/life balance, such as generous paid vacations and family leave and universal publicly funded child care and early childhood education.The U.S. could learn a lot from Europe. Americans have some of the longest working hours in the developed world and some of the shortest paid vacation leave. In Europe, employees are typically given between four and six weeks’ paid vacation time by their employer. What’s more,  the European Union has adopted a Working Time Directive that specifies that workers aren’t allowed to work over an average of 48 hours per week over a specified number of weeks. Most E.U. countries have embraced this Directive.  And all have paid family leave. It’s time we caught up.