December 20, 2013

The link between parental leave and the gender pay gap

FT_gender1223

Among 38 of the world’s more developed nations, the United States has the least liberal government policies regarding paid parental leave, leading some to argue that this puts American women at a disadvantage as they navigate their careers.

FT_13.12.17_WageGapBut it also turns out that some countries that offer more liberal parental leave policies have higher pay gaps among men and women ages 30 to 34, according to analyses of 16 countries conducted by the Organization for Economic Cooperation and Development. OECD theorizes that this link may be  driven by the fact that women are more likely than men to actually use their parental leave, and that time out of the workforce is associated with lower wages.

The hourly pay gap in the U.S. is now 16%, according to a recent Pew Research Center report on gender and work – meaning that women today earn 84 cents for every $1 a man earns in an hour. This gap remains persistent, but has shrunk markedly from 36% in 1980.

Using a slightly different metric, the OECD  found that the pay gap in the U.S. was about 18%, slightly higher than the median pay gap across 26 OECD states, which was about 14%.

Countries with lower pay gaps include New Zealand and Belgium; these nations also provide little by way of paid time off for new parents. Countries with higher pay gaps include The Czech Republic and Austria, both of which offer new parents about 10 months of paid parental leave (this figure does not reflect unpaid leave, or paid maternity or paternity leave).  The U.S. has no national paid family leave policy, though a bill was recently introduced in Congress proposing one. (Some private U.S. employers offer paid leave.)

But parental leave and gender differences in work experience are not the only factors associated with the gender pay gap. As is the case in the U.S., across these other 25 countries the gap increases with age, and with parenthood. As in the U.S., women in most of these countries have more education than men; this reduces the pay gap to some extent.

FT_13.12.17_WageGap_Unequal_updatedIt’s difficult to know the extent to which other factors may be driving the pay gap. What is clear is that among majorities in several developed nations, there is a perception that women are at a disadvantage when it comes to job opportunities.

In 2010, Pew Research surveyed publics in a number of countries, seven of which are also represented in this pay gap data, about whether “men get more opportunities than women for jobs that pay well, even when women are as qualified as men for the job.”  Majorities in all seven countries agreed with the statement.  Agreement ranged from about seven-in-ten in the U.S. and Spain (68%), and up to more than eight-in-ten in Poland (83%) and Germany (84%).

Topics: Gender, Work and Employment

  1. Photo of Gretchen Livingston

    is a Senior Researcher at the Pew Research Center’s Hispanic Trends Project and the Pew Social & Demographic Trends Project.

Leave a Comment

Or

All comments must follow the Pew Research comment policy and will be moderated before posting.

10 Comments

  1. Brocardo Reis2 months ago

    I have checked in detail the two separate sources linked right below the first figure, namely the “OECD Family Database” and the “OECD Database on Earnings Distribution”. None of these two sources seems to actually make available the data on gender pay gap at the age group 30 to 34 indicated as a subtitle of the figure. The closest substitute is the age group 35 to 54, or otherwise the total population (see page 6 at oecd.org/els/soc/LMF1.5%20Gender…). Hence, it is hard to understand how the scatter plot in the first figure was actually obtained.

    In fact, using the entire “OECD Family Database” data on parental leave length (x-axis) and the pay gap data on the age group 35 to 54 (y-axis), one obtains an extremely low regression fit (2%). So, the correlation is statistically positive but practically null. Indeed, the plot reveals that a few extreme observations may drive the results (outliers). Removing these four dots on the extreme right-side of the x-axis delivers a completely opposite correlation. It now become negative. All this can be verified here: imgur.com/ntG1Oyj

    So the bottom line is that there is no robust correlation between the two variables. Not mentioning this fact is at the very least misleading to the statistically inexperienced reader.

    Reply
    1. Brocardo Reis2 months ago

      ERRATA CORRIGE: The age group that is available in the data is 35 to 44 years, as correctly reported in the figure imgur.com/ntG1Oyj. In the comment I had mistakenly wirtten “35 to 54″ twice. Apologies.

      Reply
    2. Gretchen Livingston2 months ago

      Thanks for your comment. The OECD website can definitely be difficult to navigate. The wage gap data used in the scatterplot can be found here:
      keepeek.com/Digital-Asset-Manage… . As I wrote in the blog post, the correlation analysis was conducted by OECD researchers, who calculated an r-squared of .6. There is more information on that research (and another link to the actual data that they used) on page 172 of this report: oecd.org/inclusive-growth/Closin… . Results of regression analyses are available on page 209.

      Reply
      1. Brocardo Reis2 months ago

        Thank you for the clarifications you have provided. The OECD regression analysis conducted on the 30–34 age group has fewer observations (countries) than the other age groups. That is why there are fewer points in the OECD graph relative to the graph I have provided in my first comment. And that is why results change so much.

        Again, thank you for clarifying.

        Reply
  2. Reader8 months ago

    My conclusion:
    1) There is 10% descrimination (or some factors not explained by parental leave)
    2) The slope 20%/parental leave year is actually economically driven. Suppose you hire someone young expecting them to work on average 5 years. Now is they are going to have a child and parental leave is a year, then they are going to work for 4 years but you are going to pay for 5, hence the pay should be 20% less.
    3) The study should actually be clear of female vs male parental leave as the explanatory factor is the difference in the two.

    Reply
  3. Gary Townsend8 months ago

    Are there any studies that suggest a relationship between this gender pay gap and national birth rates? To me, the information in this article would seem to hint that there is.

    Reply
    1. Gretchen Livingston8 months ago

      Yes there could be any number of other factors correlated with both the pay gap and parental leave, and variations in fertility is one that came to my mind, as well. Not sure if there is empirical evidence on this or not, but great question.

      Reply
  4. Gretchen Livingston8 months ago

    MK,
    This research from the OECD is based only on their measure of ‘parental leave’ which they define as leave available to either parent to care for an infant or child, as opposed to maternity leave (which is typically for new moms) and paternity leave (which is typically for new dads). I’m not clear on why NZ is classified as it is in the OECD data, but more information on how the OECD deals with operationalizing and standardizing these complex leave policies is available at oecd.org. It’s also the case that family leave legislation continues to undergo change in many countries, and the data used for the OECD analysis, and for the scatterplot shown in the blog post, may not reflect the parental leave levels available in these countries today. The data shown in the scatterplot are from the OECD 2012 Family Database and the OECD Database on Earnings Distribution.

    Reply
  5. MK8 months ago

    How do you figure that New Zealand provides “little by way of paid time off for new parents” !? See dol.govt.nz/er/holidaysandleave/… for details, but the basics are that up to 14 weeks of paid parental leave is available, to be split between the parents as they see fit.

    Likewise Australia and Ireland don’t really belong on the “0″ column

    Reply
    1. K Brown8 months ago

      MK,

      Good observation. This information at the link you provided is possibly available for all the other countries used in the survey. It would be good to see this study be redone using the official data of how many days are available.

      Reply