Eliminating the gender pay gap for equal work is one of the targets of Sustainable Development Goal 8. In 2019, to drive action toward its achievement, the United Nations General Assembly declared September 18 International Equal Pay Day. While eliminating the wage gap is an aspiration with which we all agree, it is one of the most difficult labor market outcomes to achieve.
Between 2000 and 2019, the gender gap in the region’s labor participation rate narrowed from 33 to 25 percentage points. This happened largely because of women’s increasing levels of education. However, for the same period, analyses conducted at the IDB for the Gender and Diversity Sector Framework find no evidence of a reduction in the wage gap. In Latin America and the Caribbean, in 2019, women earned on average 23% less than men with similar education and experience. This wage gap begins or widens with the arrival of children in the family. Studies in the region highlight the importance of motherhood for the persistence of gaps in labor participation and earnings.
But why is it so difficult to reduce the gender wage gap? A combination of structural factors and social norms that have little to do with the labor market may be the answer.
Woman = Caregiver: the Core of the Pay Gap Issue
Gender norms associate women and girls as the primary caregivers of dependents, both inside and outside the household. Time-use surveys in the region reveal that care and other unpaid household work bear disproportionately on women. Women dedicate more than twice as many hours as men to these tasks: 38 versus 16 hours per week. The gender gap in time spent on care and the gap in labor market insertion is intensified in households with young children. The labor market participation gap increases to 40 percentage points between men and women with children under five, while the gap is smaller (24 pp) for those with children over 18.
The COVID-19 pandemic highlighted the persistence of social norms. Increasing care and domestic work needs of households in the face of school closures, care for the sick, and social distancing measures further deepened inequality in the distribution of household duties. An IDB/Cornell survey of 17 countries in the region found that two-thirds of the women surveyed said they were solely responsible for cleaning and cooking. In contrast, less than a quarter of men reported doing so. Similarly, during the pandemic, nearly 60% of the women surveyed said they were solely responsible for their children’s education at home, compared to only 14% of men.
Time is Limited
The popular belief is that women are better multitaskers than men. However, empirical evidence shows that this is a myth. When accounting for both paid work and unpaid care work, the result is simply that women work longer. In short, the hours dedicated to care, domestic chores, and, in general, household management, are hours that women do not use to plan their careers, continue their studies, participate in social, political, and cultural activities, or simply rest.
Gender norms regarding the role of women in family care influence girls’ aspirations and dreams from childhood. They also affect young women’s educational and employment decisions. They tend to value more strongly than men those careers and jobs that allow them to reconcile their family responsibilities with what they consider to be their family responsibilities.
Studies conducted by the IDB to understand gender differences in the assessment of job offers clearly illustrate this issue. In 2022 we surveyed more than 5,000 people in Argentina, Colombia, Chile, Mexico, and Peru. When asked about the characteristics they considered most important when applying for a job vacancy, we found significant differences between men and women, as well as some equally relevant similarities. For example, both men and women consider salary to be the most important factor in a job, with more than 30% of the responses, with no significant difference by gender. On the other hand, the two job attributes most closely linked to work-life balance, working hours and location, were more highly valued by women than by men. These gender differences were significant.
Why does the wage gap between men and women exist?
The literature gathered from across the region points to two key factors in explaining the gender pay gap. The first is the gender difference in the sectoral and occupational structure of employment. That is, men and women work largely in different sectors and occupations, which is known as horizontal segregation. While women are overrepresented in personal services, education, health, and commerce, men make up the majority of workers in the construction, electricity, and transportation sectors. In Latin America, the proportion of women in the five highest-paying fields (business, law, health, ICT, and engineering) is 35 percent.
Additionally, there is the effect of vertical segregation, which refers to the low proportion of women in management positions and their high presence in professional occupations within the same sector. In the region, men are twice as likely as women to hold executive positions. Thus, the concentration of female workers in sectors and occupations with lower average pay is reflected in the wage gap.
The second cause is the wage gaps within the occupation and/or sector. Considering men and women with the same education and experience, when analyzing hourly wages within the same sector and occupation, there are still significant salary gaps that cannot be explained. These differences may be due to factors that are not observable in surveys or to discrimination.
What policies have the power to close the wage gap?
For the region to move towards a scenario in which men and women earn the same for work of equal value, it will be imperative that they share not only paid work but also domestic work and childcare. In short, achieving equality in the labor market requires changes in social norms, new legal and regulatory frameworks, and public and private policies that enable families to reconcile parenting and work.
The Gender and Diversity Framework summarizes evidence on three policies that reduce barriers to women’s economic participation and the wage gap.
1. Flexibility
Flexibility practices can help employees perform their jobs so that they can better meet their family responsibilities. These practices include part-time work, working from home, flexible schedules, job sharing, and compressed schedules. A study in Canada shows that flexible work schedules tend to reduce the disadvantage of mothers, especially for college-educated individuals, and that working from home also reduces the wage gap in most educational groups.
2. Child Care
The availability of quality childcare centers increases women’s participation in the labor market. Evaluations of interventions in Latin America show a consistent positive effect between access to childcare centers and women’s labor force participation. Results indicate increases of 2% to 22% in the likelihood that the mother is employed if given access to subsidized child care. Studies of what happened during the pandemic show that child care also affected women entrepreneurs and the survival of their businesses.
3. Family Leaves
Family leave has the potential to facilitate the reconciliation of work and family responsibilities. The evidence on the effects of family leave is promising but still limited in Latin American and Caribbean countries. The conclusion of the studies is that maternal leave of less than one year may improve women’s job continuity, while longer leave may have a negative impact on career development. There is a need to increase knowledge about the effectiveness of paternity leave.
Equalizing the scale: lessons for an equitable future
While the gender pay gap may be generated by differences in pay for the same work, evidence suggests that there is more to it than that. Inequality in the distribution of care and social norms may be a decisive factor in choosing jobs that pay better. Solutions aimed at perhaps not-so-evident issues, such as ensuring that motherhood and work go hand in hand, could be the key to equalizing the scale.
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