Is the gender pay gap a myth? | Richard Reeves

• The gender pay gap is, simply put, the gap in the pay levels of the median man and the median woman. We've seen huge progress in closing the gender pay gap from 64 cents on the dollar a few decades ago to 82 cents on the dollar now. So that obviously represents huge progress by women in the labor market. It's obvious when we think about it for a moment that it's not- that doesn't mean all women earn less than all men.

And when we look quite hard at the picture, what we see is that 40% of women now earn more than the median man, which was only 13% in 1979. Imagine a world where the earnings of women and men looked exactly the same; it would be 50%. So we're not at 50% of women earning the same as the median man, but we're at 40%. And so what that means is there are a lot of women who are earning quite a lot more than a lot of men, and that's great news.

What that means is that we are getting closer and closer to gender equality, even if we haven't got there yet in terms of earnings. The question then becomes: Why is the gap there? Why was it there before? Why is it there now? And there are a number of things that could be causing the gender pay gap, and the one that's most commonly cited is discrimination: is that women are paid less for doing the same work as men. That clearly used to be a relatively large factor in the past. It's one of the reasons why we have equal pay legislation, to make that illegal for employers to engage in.

But as women have progressed, that's become less and less part of the story. A much bigger part of the story has become two really big factors: one, that women are tending to be in occupations that are lower paid. So there's differences in occupation, which we have to understand, but the really big one is differences in child-rearing and childcare.

So what happens with the discussions about the gender pay gap is, I think, quite a lot of misunderstanding. You'll get people on, particularly on the right, saying it's a myth! Once you control for education and occupation and time spent raising kids, the gap almost disappears- it goes down to say, three percentage points, four percentage points, and that's true. But then the question is: Well, why do we have that occupational segregation? Why are the women the ones taking the time out of the labor market to raise the kids? Maybe that's where the structural inequality is now.

So it's not a myth, it's just math; it's still there, but it's also not true, as many perhaps on the other side will claim, that it's evidence of purposeful discrimination. That's really not the main driver of it anymore, even though that's a popular explanation. You hear the gap and think: "Oh, there you go, it must be discrimination." But it's not really employer discrimination driving it now- it is these different patterns of work.

So if we look at the earnings trajectories of men and women until they have children, they look very similar now- there's almost no difference. But then, once they have children, women's earnings significantly decline relative to men. For women, having a child is the economic equivalent of being hit by a meteorite. Whereas for men, their earnings continue to go up. There are two big reasons why having kids has this big effect on women's earnings and employment: number one is the simple one- that they take more time out of the labor market to look after kids, especially when they're young.

So, most women with kids who aren't ready to go to school yet, so in the first four or five years of life, are either working part-time or not working. That's not true for the fathers. But almost to rub salt in the wounds, the very age at which most women are taking that time out of the labor market or going part-time, in one way or another, slowing down or reducing their time in the labor market, turns out to be years that are really critical for career development, especially in certain careers.

Just at the point where your career is starting to take off, you're taking on seniority, getting promoted into management roles, and so on, that's when you take this hit. And so what that means is the impact of the time you take out of the labor market isn't just that time; it's the long-run effect it's had on your career progression. So there is this double hit that predominantly women face in terms of having kids.

Given the main reason for the gender pay gap is this 'parenting gap,' the amount of time that women versus men are putting into raising kids- that doesn't mean it's not a problem. It means it's a different kind of problem. And there are various things we should and can be doing to address it: number one is to reduce just how big an impact taking time out of the labor market or working part-time has on your career.

So much more generous paid leave, for example; the U.S. is about the only country of advanced economies to not have federal paid leave. The second thing is we can redesign career ladders such that there isn't such a big impact as people just getting to that point where they're gonna be promoted. So we have to redesign careers so that they are more compatible with flexibility.

The other really big thing we have to do is both to encourage and enable fathers to do more of the work on the home front. It may well be true, but going forward, women will still do more of the care in the very early years. I do think there's some evidence that that is a preference that women have, but that doesn't mean that they do it all the way through. There's a huge role for fathers all the way through parenting, including in adolescence.

I sometimes feel like the discussion about parenting assumes that kids are grown up at the age of five, and it's just about the early years; having raised three boys to adulthood, I'll tell you, it's not a few years. It goes on and on and on for decades. And so finding a way for moms and dads to share more equally the tasks around parenting over that longer timeframe is hugely important.

And that's why if we do have leave policies, they should be available to men equally as to women. And they should be available at any time in a child's life and not just in the early years because parenting is a marathon, not a sprint. And I think we can ask fathers to do much more without necessarily saying they have to do it right at the beginning.

The good news about the gender pay gap is that it has been shrinking over the last few decades. We have seen women really making good progress relative to men. The bad news is that we're now at a point where some of the structural obstacles to continued progress have become much clearer, and in particular, the different ways in which forming families and raising kids bears on women's economic progress compared to men.

So, we've gotten a long way, but we've also revealed now some really deep problems which are about the very ways in which work and family go together, or in some cases frankly, don't go together very well, and how that is mostly affecting women. So, that means that to make more progress, we're gonna have to work a lot harder.

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