The gender pay gap.
Do women earn less because they choose family instead of good paying careers?
Is it because men are just BETTER at certain skills (that pay more)?
Nobel Laureate, Claudia Goldin has made significant contributions in understanding the role of career choices in explaining the gender wage gap.
Here are a few points that explain the wage gap.
1️⃣ Human Capital and Occupational Sorting:
She argues that women often invest in different types of human capital than men. Additionally, women may be more likely to choose occupations that offer flexibility or are perceived as family-friendly, even if they pay less.
2️⃣ Temporal Flexibility and Career Interruptions:
Goldin's research highlights that women's choices related to temporal flexibility, such as part-time work or taking career breaks for family reasons, can contribute to wage disparities.
Women may choose occupations or work arrangements that allow them to balance work and family responsibilities, but these choices can impact their earning potential.
3️⃣ Penalties for Part-Time Work:
Women, who may choose part-time work for caregiving reasons, can face lower wages per hour worked compared to their full-time counterparts.
4️⃣ Sectoral Differences:
Some sectors may have a smaller gender wage gap because they offer greater flexibility or have policies that support work-life balance.
5️⃣ Cultural and Social Norms:
Goldin has highlighted the influence of cultural and social norms on women's career choices. Societal expectations and gender roles can shape the decisions women make regarding their careers, impacting the fields they enter and the level of commitment they demonstrate.
There are several myths our society believes regarding women and their career choices. One pervasive myth is that women are simply more emotional, whereas men are just better at thinking rationally.
SUUUREEEE.
From Goldin's research we understand that this is VERY COMPLEX and that much of these choices are influenced from a young age by our socio-cultural norms about the expectations of women in family life.
We also can't forget that these careers are also less-paid whenever women become the majority. As observed when secretaries transitioned from a male-dominated career to a female-dominated one.
From a financial planning perspective, we need to incorporate these inequalities in couple's spending and savings decisions, but also from a life-planning perspective.
