December 11, 2013

How Pew Research measured the gender pay gap

Women earned 84 cents for every $1 made by men in 2012, according to a new report released today by the Pew Research Center.

How did we get to that number? In October, the U.S. Bureau of Labor Statistics  reported that women earned 81 cents to the dollar. The difference is not large, but what gives?FT_13.12.09_genderAndWork

One reason is that our study estimates the gender gap in hourly earnings while the government estimates the gap in weekly earnings. We chose to use hourly earnings, estimated as usual weekly earnings divided by usual hours worked in a week, because it irons out differences in earnings due to differences in hours worked.

For example, women are twice as likely as men—26% versus 13%—to work part-time.  Naturally, that has a significant impact on the relative earnings of women and men if one looks at weekly earnings. To account for the skew in hours worked, the government’s estimate of the gender pay gap is derived for full-time workers only, defined by the government as people who usually work at least 35 hours per week.

Restricting the estimate of the gender pay gap to full-time workers is not without limitations. For one, it leaves out a significant share of women and men when calculating the gender pay gap, namely those who work part-time. Moreover, just looking at full-time workers does not eliminate the difference in hours worked. Even in this group, men report working longer hours—26% of full-time men say they work more than 40 hours per week compared with 14% of women, according to government data.

The BLS, of course, is aware of these limits and it reports several other measures of the gender pay gap—for workers paid by the hour, for part-time workers, and for workers grouped by the number of hours worked in a week. According to their data, women who are paid an hourly rate earned 86% as much as men who are paid an hourly rate; women working part-time earn 104% as much as men working part-time; and, at the extreme, women who worked five to nine hours in a week earned 119% as much as men who worked the same number of hours. The reasons why women who work fewer hours earn more than men are complex, but a contributing factor is that women who work part-time are older than men who work part-time.

As it turns out, our estimates are similar to the government’s estimates, not only for the moment but over an extended time. The BLS reports that the weekly earnings of full-time women relative to weekly earnings of full-time men increased from 64% in 1980 to 81% in 2012. Our estimate, based on hourly earnings of women relative to men, shows an increase from 64% in 1980 to 84% in 2012. In the intervening years, the two estimates trend together very closely.

Which is the preferred basis for the gender pay gap—weekly earnings or hourly earnings?

The two measures offer different perspectives, and, like many other things, the choice is with the beholder. Those wishing to focus on specific segments of the labor market may prefer the several different estimates broken down by the BLS. Those wanting to focus on the overall figure for working women and men may prefer our more encompassing approach, which uses hourly earnings.

Regardless, the pay gap estimates show that women earn 16-to-19% less than men. What explains this gap in the earnings of women and men?

Some of it is due to differences in the types of jobs (occupations) women and men do and some of it is due to the effects of parenthood on women and men. Research also suggests that women may not negotiate for higher wages as aggressively as men or they may be more likely to trade off higher wages for other amenities, such as flexible work hours. Other pieces of the puzzle—attributes employers value but that are not captured in available data or the presence of discrimination—are more difficult to quantify.

Topics: Gender, Work and Employment

  1. Photo of Rakesh Kochhar

    is Associate Director for Research at the Pew Research Center.

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  1. aloke chakravartty2 months ago

    It is a sad situation because those who are in power do not feel for it. All men have mothers so 100% population have same origin and they were sustained by only mothers those are Women. Yes, in most of the jobs where less physical efforts are required men and women are same. In India women are also working as labour plus looking after their family still get less paid. It is criminal to make such distinction. Worst is you will make effort but will not be able to create public opinion. Some are influenced by their religion or by so called social values. The society which makes such distinction in the long run dies as is happening in the west. Education can change all that. The governments will have to act even at the risk of losing election or governments. I read eminent personalities giving statistics wast of time we all know that just make an action plan. First bring them on equal terms then one will decide what will be the social structure. In India ,before Muslim invasion, there used to be a system. A women had a right to choose her husband and it was called “Sawembare” means self selection. Then India was developed and had so many great people but now we have people with lower capabilities,hence underdeveloped.
    Forget that even there is distinction of pay between Europeans and Indians in Middle East for men. We are still going by the colour of the skin knowing very well that all have originated from Africa.
    Aloke Chakravartty,MBA,Phd

  2. PhedUp7 months ago

    Can you explain why jobs done primarily by women are valued less than those done by men? The so called ‘caring professions’ are valuable to society aren’t they? So why should they be so poorly paid on average? It can’t all come down to physical risk since a lot of tech jobs done primarily by men aren’t particularly risky.

    The point I’m sidling up to is, don’t assume that the factors you think can be quantified aren’t affected by the factors you think can’t be.

    1. Jurij Fedorov2 months ago

      Caring jobs are typically better jobs than men jobs such as garbage man. Because the user actually sees you and thanks you. This is why more people want to work in these jobs. Supply and demand creates the wage gap between these 2 jobs.