Women within the United States have been treated differently and at times unfairly as compared to their male counterparts throughout history. Even though strong women's rights' campaigns have helped to support equal opportunities for both males and females; wages, wage gaps and career advancement and opportunities, have, still been raising equality concerns. In this research paper, I will discuss the wage gap between men and women, the reasons for and extent of the gap, and strategies for dealing with gender pay discrepancies.
This paper focuses on the theoretical foundation for gender differences in the labor market as well as the empirical evidence on gender discrimination and gender differences in preferences. The study begins with an overview of country differences in gender wage and employment gaps. This section discusses how gender differences in employment rates and differences in wage dispersion may relate to the gender wage gap. This is followed by a theoretical overview of gender differences in the labor market covering both supply-side differences in human capital acquisition—the role of gender-specific preferences—and demand-side discrimination. The next section discusses the empirical problem of identifying discrimination in the labor market. The chapter rounds off with two sections covering, in turn, the empirical evidence on discrimination and gender differences in preferences (Olivetti, 654).
Gender Differences in the Labor Market: Overview
Studying differences in labor earnings is of fundamental importance for anyone interested in understanding poverty, social stratification, and the economic incentives facing workers. Labor earnings are the most important component of an employed individual's income and a major determinant of living standards. This chapter therefore begins with a comparison of gender labor market gaps in a selected number of industrialized countries. First, an overall picture of gender wage gaps and differences between countries are provided, followed by a description of the trends in these gaps during the last 20 years. Country differences in gender wage gaps are related to differences in female employment rates as well as varying wage distributions across countries. Possible explanations for the wage gaps observed, such as productivity differences, occupational gender segregation, preferences, and discrimination are discussed in subsequent sections (Niederle, 1101).
The gender wage gap
The gender wage gap is defined as 1 minus the ratio of the annual averages of female and male mean hourly wage rates, which can then be interpreted as how much less, as a percentage, women earn per hour relative to men. For example, a gender wage gap of 23% in the United States in 2006 means that the female wage rate is 23% smaller than the male wage rate. In other words, for every $100 that men earn per hour, women earn 23% less—that is, $77. As shown in Table 54.1, gender differences in pay prevail in all countries, even though the size of the gaps varies considerably across countries. In 2006, the female hourly wage rate in France was 11% smaller than the male hourly wage ...