Despite significant progress in closing the gender gap in earnings, work remains highly gendered, with women continuing to participate less in the workforce, work fewer hours, and face persistent wage disparities. This column examines the evolution of gender studies, highlighting two key academic explanations for the remaining gaps: inherent gender differences and societal constraints. The authors explore how cultural norms, career-family trade-offs, and evolving work structures – such as remote and gig work – affect gender inequality. Understanding these factors is essential for crafting policies to enhance allocative efficiency and reduce persistent gender disparities.
While women have made significant progress in closing gender gaps in earnings, the allocation of work remains heavily gendered, both in the labour market and at home. Women continue to be less likely to participate in the workforce, and those who are employed work fewer hours than men. Even among those fully attached to the labour market, women continue to earn less per hours worked. Moreover, women’s underrepresentation in market work is more than offset by their disproportionate share of unpaid work in the home (Andrew et al. 2024).
Our recent work (Olivetti et al. 2024) traces the evolution of the study of gender, focusing on how academic thinking on this topic has evolved and how past insights inform current perspectives on addressing the remaining gender disparities in the labour market. Existing research emphasises two fundamentally different explanations for the existence of such disparities. One view is that men and women have inherently different preferences, skills, or psychological traits that drive their choices in education and careers. In this case, gender inequality is simply a manifestation of essential differences between men and women. The other view posits that men and women are similar in the relevant dimensions but face different opportunities and constraints. In this case, gender inequality is a symptom of misallocation, and policies that promote gender equality can improve allocative efficiency. A key challenge, however, is that observed gender differences in skills, traits, or preferences could themselves be endogenous to constraints in the form of norms, stereotypes, and discrimination, making it complicated to distinguish between the two explanations.
The emerging consensus is that gender differences in preferences or psychological traits play, at best, a modest role in accounting for the observed gaps in pay (Blau and Kahn 2017). Relatedly, research in social psychology that explores gender differences in a wide variety of domains – including cognitive traits, communication styles, personality, and social traits – establishes that, with a few exceptions, women and men are more alike than different (Hyde 2014). In other words, gender differences in mean characteristics are typically small compared to the dispersion of the same characteristics within-genders.
The relevance of gendered constraints for understanding remaining gender gaps has shifted academic discourse to be more upfront about the allocative efficiency consequences of persistent inequality, recognising that enabling both women and men to reach their full potential in the labour market can confer significant economic gains through improved talent allocation – gains that need not come at the expense of the other group. Supporting this view, seminal work by Hsieh et al. (2019) documents recent economic growth resulting from improved access to labour market opportunities for women and Black men in the US. Related work on specific sectors of the economy highlights productivity gains associated with the entry of women into male-dominated professions and the entry of men into female-dominated professions.
Women’s primary role as child bearers and caregivers is a key hurdle to their continued participation, especially to their entry and retention into highly paid but time-demanding careers. There is now ample evidence suggesting that parenthood drives a large wedge in the career trajectories of mothers and fathers (see, among others, Kleven et al. 2018). Following the decline in productivity gaps and outright pay discrimination, the remaining gender pay and participation gaps in developed countries mostly boil down to career-family trade-offs.
An emerging body of work analyses the precise mechanisms at play, emphasising the role of preferences for job amenities such as shorter hours, commutes, work flexibility, and working from home. These translate into earnings gaps whenever women have a higher willingness to pay for family-friendly amenities than men. Such constraints have demand-side implications as well, whereby women’s smaller choice set of jobs could result in wage-setting power for employers in monopsonistic labour markets and a larger markdown of women’s wages below productivity levels.
Much of the extensive literature on career-family trade-offs focuses on mothers, often overlooking the fact that motherhood earning penalties are frequently accompanied by fatherhood premia. A more integrated perspective on couples could help us understand patterns of spousal specialisation upon childbirth and their role in shaping child penalties and premia.
The observation that work-family issues remain a ‘woman’s problem’ despite women’s economic progress has brought to the fore the relevance of cultural and identity-related factors in understanding remaining gender disparities. The past two decades have seen enormous progress in economists’ understanding of the role that prescriptive norms and stereotypes play in shaping career-family trade-offs. The research has credibly established the importance of prescriptive cultural factors for family formation, household specialisation, and labour supply, while at the same time exploring the influence of families, education, public policy, and the media in eroding or perpetuating gender stereotypes.
Stereotypes and beliefs about women’s (and men’s) abilities and the appropriate set of activities in which they should engage could lead to pre-market discrimination in the form of constraints on skill investment and educational choices, as well as differential treatment by employers. The net effect is a self-fulfilling cycle whereby individual preferences, traits, and skills are endogenous to gendered norms and societal expectations.
Current developments in the organisation of work and cultural shifts have sparked debate regarding the outlook for gender inequality. There is some indication that certain professions are becoming ‘greedier’, increasingly rewarding long and inflexible hours and raising the returns to specialisation within households. Another important development has been the rise in gig work and remote working opportunities as more businesses embrace digital technologies. Insofar as gig or remote work encourages worker substitutability, penalties associated with work flexibility should be minimised. Nevertheless, while women continue to be the primary childcare providers, such developments could further entrench household specialisation. The freedom of choice and lack of structure in gig and remote work could, paradoxically, make women even more available to take on additional household responsibilities, possibly resulting in productivity losses. Understanding the ‘technological’ and cultural sources of the convex returns to long (and inflexible) hours – as well as a broader consideration of how the structure of work interacts with existing gender roles – would help efforts to harness technology in the design of more equitable workplaces.
On the family front, parenting has also become more time-intensive: over the past two decades, time spent with children has risen steadily for both parents, but especially so for college-educated mothers in high-income countries. There are signs that rising demands for parental time could be driven by increasing returns to education and non-cognitive skills, coupled with higher competition for top schools and colleges. These developments are likely to increase the costs of motherhood, actual or perceived, potentially interfering with mothers’ labour market involvement and fertility decisions.
On the cultural front, the gradual evolution towards more gender-balanced social norms has nonetheless been accompanied by a resurgence of gender conservatism in both developed and developing countries, often intertwined with the rise of populist politics. We expect that efforts to address gender disparities in the labour market will have to contend with these emerging challenges. While effectively revealing the cultural roots of ‘family penalties’ for women, research should deepen our understanding of how families, education, and the media erode or perpetuate gender stereotypes, as well as the underlying social processes that drive the formation and persistence of gender norms. This knowledge will be crucial for informing policy interventions in these areas.
Source : VOXeu
