Factors Affecting the Gender Pay Gap and its transformation over the years.

Question

Purpose Of Task: The purpose of a Research Report is to inform your audience about research that you have conducted and to discuss the results you have found. Academic research aims to develop our existing knowledge, so your Research Report should highlight the current understanding of the subject by reviewing other studies. Your Research Report will then present your findings. Your Research Report will conclude by examining the significance of your findings and their relationship to the findings of other research already conducted. Your Research Report will also discuss the limitations of your study and give suggestions for further research.

Task: Imagine that you have carried out a research project addressing the following question:

“How has the ratio of female to male full-time earnings changed over the past 60 years?"

Answer

Introduction
The social inequality between male and female, especially in the domain of “gender pay gap”, has been a matter of research since quite some time (Weichselbaumer and Winter?Ebmer, 2005, p 510). The current scope of research undertakes literature analysis to analyse the “gender wage gap” in the United States for a period of 60 years. Focusing upon the United States will enable applying similar learning to other countries, especially the developed nations. The evaluation of long-term analysis in the “gender wage gap” is seen to be reducing in nature (Kopczuk, Saez and Song, 2010, p 110). The study considers PSID microdata from the 1955-2014 trend of the “gender wage gap”, through literature analyses by arriving at results and discussions from such data.

Literature Review
The “gender pay gap” in the U. S. has been seen to be narrowing since 1980 then stabilizing in the past 15 years. Pew Research Centre report reveals in 2018, the “gender pay gap” has narrowed substantially with women earning 85% of men’s earning in the U. S. Data collected in the year 1955 revealed 65% “Female-to-Male Earnings” Ration of full-time workers. With World War II coming to an end, there was an immense industrial revolution, which saw greater participation of female workers. Several domestic industries were set up during this period with women entrepreneurs. Cohen and Huffman (2007) suggest, women increasingly started to realize their earning role in the family and the potential contribution which they could make. Revolution in the education system with the implementation of a formal system of schooling was responsible for growing participation of women both in the organised and un-organised sector.

In the 1980s, there has been seen a strong convergence in the wage rate of men and women, with plateauing of the trend in the 1990s. The convergence in the “gender pay gap” in the 1980s resulted in a sharp fall from 21-29% in 1980 until 8-18% in 1989 (Petersen and Morgan, 1995, p 360). This gap has been attributed as unexplainable, and it did not continue to succeed over the next 20 years. The gender gap unexplained in nature decline showed more gradual at the top of the wage distribution as against the middle or bottom levels.

A significant introduction in the female labour force had traditionally reduced occupational segregation by sex (Altonji and Blank, 1999, p 3200). Various policies had contributed to greater participation of female in the labour force, some researchers identify impact from psychological attributes, non-cognitive skills and norms to be another pertinent factor which contributed to the “gender pay gap”.

Post the period of the 1980s till 2010, there was noted a significant improvement in College with University education participation from women, experience and occupational representation. A notable factor that contributed to a reduction in the “gender pay gap” was female participation in union coverage.

Though an overall improvement in the “gender pay gap” was notable through U. S., locational factor seemed to be an integral factor indifference in the labour market, through occupation and industry. Arulampalam, Booth and Bryan (2007) state remarkable improvement in women's measured skills, college attendance and women's commitment to paid labour force resulted in role reversal for women in the latter part of the 20th century. The important role played by a traditional human capital factor, comprising of education and experience contributed to the narrowing of the “wage gap”. Attainment of women in education has greatly led to reducing gender experience gap. There is a portion of the labour market where the role of workforce interruptions and attainment in education has reduced gender wage gaps in an occupation requiring high skills.

Researchers through their analysis reveal a reduction in gender differences across occupational distributions are the quantitative factors, resulting in converging and narrowing of men's and women's wages. There is a tendency amongst men to determine a particular geographic location for the family, which contributes to the “gender wage gap”. Dual career issues in family locations is an important factor for the division of labour. There is no literary suggestion to prove that labour market discrimination to be a factor for the “gender wage gap”.

Recent research in gender pay gap attributes psychological attributes or non-cognitive skills to be factors for gender differences in outcomes. There are certain identified male advantages such as risk aversion, competitiveness and propensity to negotiate which contributes to the gender wage gap (Aizer, 2010, p 1850). Analysis of men and women skill levels and their economic locations by firm, industry and occupation can decide overall labour market price and have a significant effect on the “gender wage gap”. In OECD countries it is noted that the compressed wage structure is a result of unions and centralized wage settings. This factor might also lead to lower female employment and raised disparity in wages between men and women employees. The impact of wage-setting institutions on “gender wage gap” has a significant role in minimum wage hike, which further leads to bringing about the disparity in the wage between genders.

Results
Results collected from the year 1955 till 2014 depicts a gradual reduction in the “gender pay gap” between female to male. Data in the year 1955 revealed 64% Earnings ratio between Female-to-Male full-time workers. Detailed analysis of the data reveals that while comparing the “gender wage gap” in the wage distribution scale, the decline at the top “wage distribution” had been more gradual with more rapid at lower levels.

Post 1955 the graph depicts a gradual decline in the Earnings ratio between Female to male. the graph bottoms out in the year 1973 with the gender wage gap touching all-time low in the 60 years, depicted in the graph. In 1973 the earnings ratio of female to their male counterpart has been seen to be 56%.

Post-1973, the results gradually turn in favour of increasing female to male earning's ratio. The climb of the graph till the period 2014 reflects that there has been a gradual increase in the “female-to-male earnings ratio percentage”. The trend of the “wage distribution” is slower at the top as compared to middle and bottom levels.

Discussion
The results from the study over 60 years period show reducing earnings ratio disparity amongst men and women. The data taken from the period of 1955 reveals that women faced greater disparity when their wages were compared to men. With changes in the social structure and educational settings, more and more women started contributing to the structural economy. The data evaluates and compares “female to male earnings ratio” of full-time workers, aged 14 years and above from 1955 till 1979 and aged 16 and above from 1979. Gradual reducing and disparity between female to male earnings ratio can be attributed to growing education and skill settings amongst women and their need to work full time. Reformation and structural changes brought about with growing participation of women also significantly contributed to the narrowing of the “wage gap” between “female-to-male workers”.

There can be seen in a dip in the earnings ratio between “female-to-male” in the year 1973, which can be attributed to various factors. Post the increase in “female-to-male earnings ratio” gap in 1973, it started to reduce again. Towards the approach of the 21st century, a significant reduction in the “gender wage gap” is seen with women being able to procure almost similar wages as their male counterparts. However, the interesting part to note in the entire results is that in wage distribution of female to male workers, the “gender pay gap” is slower at the top level as compared to the middle and bottom levels. This can be attributed to the factor that women started getting formal education and skill training much later than their male counterparts.

Reference List
Aizer, A., 2010. The gender wage gap and domestic violence. American Economic Review, 100(4), pp.1847-59. DOI: 10.1257/aer.100.4.1847.

Altonji, J.G. and Blank, R.M., 1999. Race and gender in the labor market. Handbook of labor economics, 3, pp.3143-3259.

Arulampalam, W., Booth, A.L. and Bryan, M.L., 2007. Is there a glass ceiling over Europe? Exploring the gender pay gap across the wage distribution. ILR Review, 60(2), pp.163-186. DOI: 10.1177/0019793907060000201.

Cohen, P.N. and Huffman, M.L., 2007. Working for the woman? Female managers and the gender wage gap. American Sociological Review, 72(5), pp.681-704. DOI: 10.1177/000312240707200502.

Kopczuk, W., Saez, E. and Song, J., 2010. Earnings inequality and mobility in the United States: evidence from social security data since 1937. The Quarterly Journal of Economics, 125(1), pp.91-128. DOI: 10.1162/qjec.2010.125.1.91.

Petersen, T. and Morgan, L.A., 1995. Separate and unequal: Occupation-establishment sex segregation and the gender wage gap. American Journal of Sociology, 101(2), pp.329-365. Retrieved from

Weichselbaumer, D. and Winter?Ebmer, R., 2005. A meta?analysis of the international gender wage gap. Journal of Economic Surveys, 19(3), pp.479-511. DOI: 10.1111/j.0950-0804.2005.00256.x. Retrieved from