Gender Pay Gap: World Bank Report

Context

A recent World Bank Group report found that women receive only 77 cents for every $1 paid to males, underscoring the gender pay disparity.

About Gender Pay Gap

• Definition By ILO: The International Labour Organisation defines the gender pay gap as a “measurable indicator” of disparity between men and women.
  • Difference between Wage Levels: The ILO defines the gender pay gap as the difference between the wage levels of all women and men working in the labor market for a monthly, hourly, or daily wage.
  • Average Wage Gap: It refers to the average wage gap between all working women and men, not simply for “equal work.”

How is Gender Pay Gap Calculated?

• Differ from equal pay for equal work: It is distinct from “equal pay for equal work,” which requires equal pay for men and women with the same qualifications performing the same job.
• Variation in Calculation: There is no single way for determining the gap. Different organizations employ different measurements, such as hourly or weekly wages, resulting in disparate conclusions.
• Gender Inequality: Despite methodological differences, a gender pay disparity exists in most countries and industries, demonstrating that inequality remains a problem.

Reasons for Gender Pay Gap

• Low Labour Force Participation: 

  • Women are frequently underrepresented in the workforce relative to men due to cultural expectations and established gender norms.
    • Despite an increase in the number of girls enrolled in Class 10, India’s Female LFPR has fallen from 30% to 25% over two decades.

• Occupational segregation: 

  • Women are more likely to be employed in low-wage positions or industries, whereas men dominate higher-wage areas such as engineering and computer science, resulting in disparities in average salaries.
    • According to research conducted by the National Association of Software and Services Companies (NASSCOM), women in technology earn 29% less than men, with the difference widening even further at senior management levels.

• Underrepresentation: 

  • According to the International Labour Organization’s Women in Business and Management report, women are less likely to hold management or leadership positions, particularly at higher levels, which can affect income and contribute to the gender pay gap.

• Care Economy: 

  • Part-time work is more common among women than males, often due to caregiving responsibilities. Part-time work often pays less and provides fewer benefits than full-time positions.
    • When women take time from work to have and care for children, their earnings may suffer, resulting in fewer prospects for progress or workplace discrimination.

• Gender Stereotypes: 

  • Women have been expected to prioritise caregiving and domestic responsibilities, which can influence workplace dynamics and lead to women being undervalued or overlooked for higher-paying jobs.

• Low Educational Investment: 

• • Women may have limited access to excellent education or encounter challenges such as cultural norms or financial restrictions that prevent them from pursuing higher education or specialized training.

• Safety Concerns: 

  • Safety concerns in the workplace and during commutes can disproportionately impact women’s employment choices.

• Discrimination in the Services Sector: 

  • Pay discrimination developed considerably as the service industry grew in the twentieth century.

• Age-Related Patterns: 

  • Age-based analysis of employment data reveals that women’s earnings tend to fall in their mid-30s and 40s compared to men in similar positions and professions. This is frequently attributed to career breaks taken by women to care for children or elderly relatives

• Work-Family Balance: 

  • Claudia Goldin, a well-known economist, contends that males have traditionally been permitted to prioritise their jobs while women have been required to prioritise family duties.

• Slow Improvement: 

  • Policies such as parental leave and work flexibility gradually lower the earnings gap, but progress is slow.

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