On the 8th of March, media outlets posted a plethora of content to mark International Women’s Day (IWD). There were calls for global gender parity, including the publishing of data around the ongoing gender pay gap. A personal favourite of mine was the Twitter bot unmasking an organisation’s gender pay gap statistics whenever that organisation tweeted #IWD. Amidst this data flurry, however I noticed some contradictions – organisations with the lowest gender pay gap were not the ones listed as the best places for women to work. This made me wonder: does the gender pay gap data lie?
The gender pay gap can be measured in various ways. Ultimately it shows that working women are paid less than working men. This holds even when controlling for such things as educational attainment, working time and potential work experience. In fact, the typical (median) woman is paid 83 cents for every dollar that her male counterpart is paid. The gender pay gap is not constant and there are different dynamics to it. As raised by economist Claudia Goldin, the “gender earnings pay gap widens a lot with age and it widens a lot with [having] children, and it widens in the corporate, banking and finance, and law sector”.[1] Within this “greedy work” sector women are financially penalised for wanting more control over the hours worked. Despite there being ample research and guidance on what can be done to bridge the gap, according to the Global Gender Gap Report 2022 it will take another 132 years to close the gap.
Although the gender pay gap is shrinking overtime,[2] the impacts of the gap in the meantime are detrimental. Having lower pay undoubtedly has an impact on finances (e.g., savings, credit, debt levels etc). In addition, it aggravates the pension pay gap, as pension pots are directly linked to pay. Given that women have a higher life expectancy than men, the argument would be to accumulate higher, rather than lower, pension pots.
As expected, the gender pay gap also negatively affects women’s mental health and wellbeing. Research shows that women who make significantly less than their male counterparts are four times more likely to suffer from anxiety and two times more likely to experience depression. This mental health burden can take its toll, potentially leading women to take sickness absence and further exacerbating the gender pay gap. In fact, research in the UK shows that females are more likely than males to take some sickness absence due to illness or injury.[3]
So far, so good. It is clear that the gender pay gap damages women’s wellbeing. But here’s where it gets interesting: this does not translate to lower job satisfaction measures. On the contrary, women consistently report higher job satisfaction than men.
When comparing the best places for women to work with the top gender pay gap companies[4] the two do not match. One would expect the two to go hand in hand; instead gender pay gap data and job satisfaction measures contradict each other. As an economist, I love data. But in this instance, we need to be mindful that data is not, in itself, objective or 'true' – data can, and does, lie. It is important to unpack the layers, dig deeper and ask why the gender pay gap data contradicts job satisfaction measures.
A possible reason is that company rankings for best places for women to work are affected by wellbeing washing and do not actually reflect a good workplace for women. A further possible explanation is that women have lower career expectations and this manifests into a gender job satisfaction gap. Clarke's seminal 1997 paper shows that the job satisfaction gender gap in Britain persists even when a wide range of personal and job characteristics are controlled for. Clark suggests that women have lower career expectations as a result of gender pay differentials, discrimination and reduced promotion prospects. More recent research by the Institute of Labor Economics suggest that the gender job satisfaction gap disappears when job preferences are included. That is, women place greater importance on work-life balance and the intrinsic desirability of the work than men.
The gender pay gap hardship does not come through job satisfaction measures. However, arguably this dissatisfaction gets channelled through subjective wellbeing measures outside of work. A report by the Department for Work and Pensions shows that respondents with children, caring responsibilities and/or working part time were more likely to report a life outside of work that was moderately, very or extremely stressful. These groups were characterised by a greater proportion of women than men. Men were significantly more likely than women to describe their life outside work as not at all stressful. That is, the impacts of the gender pay gap are felt through measures beyond those related to job satisfaction. This is also evidenced by recent headlines, whereby UK women are priced out of work by lack of affordable childcare. The gender pay gap means childcare is comparatively less affordable for women, with child-bearing women being priced out of work, re-enforcing the gender pay gap. It seems that the motherhood financial penalty does not manifest itself in measures related to job satisfaction, but instead life outside of work (e.g., childcare anxiety).
Overall, while it can be measured in different ways, the data is clear: a gender pay gap exists. However, interestingly, this does not come through job satisfaction measures. Job satisfaction measures provide an untruthful view of women’s’ sentiments towards the gender pay gap. Instead, digging deeper arguably shows that the dissatisfaction manifests itself through wellbeing measures outside of work.
Humans often treat data as a single source of truth. But in certain instances, data can be misleading. At Simetrica-Jacobs we are experts in asking the ‘why’ behind the data to uncover the truth. It’s this process that is the hallmark of our work, and how we work with clients to unblock challenges in their businesses. If you would like to discuss our work further, or have an idea for a project, please get in touch at information@simetrica-jacobs.com.
[1] The gender pay gap widens with a number of other factors too, such as ethnicity, with Black and Hispanic women experiencing the biggest pay gap.
[2] Globally speaking the gap is closing, however this is an uneven process. For example, the ONS research shows that London had the smallest gender pay gap 20 years ago, but now it has the largest.
[3] It must be acknowledged that this may also be due to different discrimination, with female health issues being less formalised in the workplace, such as menopause and endometriosis. A further possible reason is that women tend to be the main carer for children and elderly and hence more likely to take absences to deal with emergencies. The gender gap in sickness absence is another data mystery and merits its own investigation.
[4] The BBC has also put together a lookup table showing the gender pay gap for companies in Great Britain with 250 employees or more.
