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New study of earnings and labor force participation finds commonly cited figures on the gender wage gap may underestimate pay inequality
Washington, DC—Women today earn just 49 cents to the typical men’s dollar, much less than the 80 cents usually reported, according to a new study by economists Heidi I. Hartmann and Stephen J. Rose released today by the Institute for Women’s Policy Research (IWPR).
The study, Still a Man’s Labor Market: The Slowly Narrowing Gender Wage Gap, uses the Panel Study on Income Dynamics, a longitudinal dataset to look at the gender earnings gaps between men and women in 15-year time spans. When measured by total earnings across the most recent 15 years for all workers who worked in at least one year, women workers faced a wage gap of 51 percent in the 2001-2015 period. The analysis also found that while the long-term earnings gap has narrowed significantly since 1968, progress has slowed in the last 15 years.
“Much ink has been spilled debating whether the commonly cited measure of the wage gap—that women earn 80 cents for every dollar earned by a man—is an exaggeration due to occupational differences or so-called ‘women’s choices,’ but our analysis finds that we have actually been underestimating the extent of pay inequality in the labor market,” said IWPR President and report co-author Heidi Hartmann, Ph.D.
Stephen J. Rose, Ph.D., report co-author and nonresident fellow in the Income and Benefits Policy Center at the Urban Institute and a Research Professor at the George Washington Institute of Public Policy, also commented, “The good news is that, over the course of the nearly 50 years covered in the study, women have seen considerable progress in the labor force by entering the workforce at higher rates and staying in the labor force for longer periods of time, which have led to higher earnings and a narrower wage gap. As progress on achieving pay equity slows, it will be important to prioritize policies that strengthen women’s labor force attachment.”
Other major findings from the study include:
- The penalties of taking time out of the labor force are high—and increasing. For those who took just one year off from work, women’s annual earnings were 39 percent lower than women who worked all 15 years between 2001 and 2015, a much higher cost than women faced in the time period beginning in 1968, when one year out of work resulted in a 12 percent cut in earnings. Women’s earnings losses for time out are almost always greater than men’s.
- Improving access to paid leave and affordable child care is critical to strengthening women’s labor force attachment and narrowing the gender wage gap. Despite considerable progress over the last 50 years, 43 percent of today’s women workers had at least one year with no earnings, nearly twice the rate of men. With high penalties for weak labor force attachment, achieving higher lifetime earnings for women will require strengthening women’s attachment to the labor force. Research has shown that such policies as paid family and medical leave and affordable child care can increase women’s labor force participation and encourage men to share more of the unpaid time spent on family care.
- Strengthening enforcement of equal employment opportunity policies and Title IX in education is also crucial to narrowing the gender wage gap further. Improved enforcement will help women enter higher paying fields and occupations that are now, despite decades of progress, still too often off-limits to women.
The Institute for Women’s Policy Research (IWPR) is a 501(c)(3) tax-exempt organization that conducts and communicates research to inspire public dialogue, shape policy, and improve the lives and opportunities of women of diverse backgrounds, circumstances, and experiences. IWPR also works in collaboration with the Program on Gender Analysis in Economics at American University.