It has become a fashion to mark International Women's Day each year with discussion about statistical differences between what women and men working full-time earn on average, and how this is a problem requiring urgent redress. Much of the pay gap between women and men is influenced by the choices people make for themselves, rather than discriminatory attitudes by employers.
For the record, the most recent Australian Bureau of Statistics figures indicate that full-time male workers earn an average of $1587.40 per week, whereas women earn $298.10 less on average.
In other words, the observed gender pay gap in this country presently stands at 18.8 per cent.
For many feminists such an outcome represents an indictment, for the pay gap is often claimed to be grounded in persistent and widespread sexism by employers refusing to extend wages to women on a par with men.
But is it really the case that the pay gap is wholly attributable to gender discrimination in the labour market?
Economic theory and empirical analysis would suggest not.
It is easy to fall into the trap of thinking the average pay gap means a woman with the same qualifications as a man, with similar tastes, and doing exactly the same job will be paid 18.8 per cent less.
But that is an erroneous viewpoint, because it implicitly assumes that individual women and men are heterogeneous workers, which they are not.
Individuals have fairly extensive choice over the quantity and quality of education, skills, and work-relevant experiences they accumulate, and this human capital investment has a major bearing on observed wages earned by women and men.
Studies show that Australian girls generally perform better than boys at school, but tend to prefer enrolling in humanities tertiary courses, which subsequently pay relatively lower wages in employment, rather than the sciences, which offer higher career wages.
Some employees seek relatively higher wages for jobs which may require longer working hours or be more risky to perform, and so "compensating differentials" required by women and men to assume those jobs also influences their wage levels.
It generally appears that women tend to assume working roles which provide more pleasant and safe conditions, and which provide greater flexibility for part-time work to accommodate family responsibilities.
Numerous empirical studies, here and overseas, suggest that factors predominantly captured by observed differences in labour market choices and worker characteristics explain a significant amount, but not all, of the variation in the average gender pay gap between women and men.
And it should also be acknowledged that an undue emphasis on the average pay gap masks important, yet more subtle, wage variations between women and men. The sorting of women and men into different occupational roles is often blamed for influencing the gender pay gap, but Australian studies have shown that women's earnings would in fact be lowered if the occupations they worked in mirrored those of men. In other words, if women worked in jobs that men currently dominate, the women's wages would be lower across the board.
This observation is partly due to the fact that there are significant numbers of middle-class female workers in public sector and related service occupations, such as nursing and teaching, but also an ample cohort of lowly paid males in industrial occupations.
Another interesting issue relates to what extent gender pay gaps across income distribution are informed by characteristics embodied in groups of workers. For example, researchers Juan Baron and Deborah Cobb-Clark found that the (median) gender pay gap for Australian low-paid workers is almost completely explained by variations in productive skills, but not so for those who are highly paid.
There is other interesting research in Australia and abroad examining the drivers of gender pay gaps on the basis of age, and even sexual orientation and gender identity, and further research is needed to provide meaningful interpretations of pay gaps between women and men.
Although the gender pay gap narrows once these factors are considered, these often do not fully explain the variation in the female-male pay gap. It is argued by many researchers that the pay gap left unexplained by empirical models may be attributed, at least in part, to gender discrimination.
In Australia national equal pay legislation dictates that women performing the same duties as men should receive the same award pay rate, but that doesn't mean sexism has no effect upon labour market outcomes. For example, young women might be deterred from studying science-related courses at university, which enable access to high-paying jobs, because of stereotypical attitudes to the effect that girls "can't do" STEM subjects at school.
But more immediate policy responses which promote economic freedom in this country could also help mitigate the effects of gender-based pay gaps on the lifetime earnings of women, partly because more competitive markets would impose greater costs on discriminating firms.
Measures promoting economic freedom, such as lowering tax burdens and deregulating the childcare sector, should also encourage more women to invest intensively in their own human capital, and help smooth transitions between work and family responsibilities.
For International Women's Day 2016 it would be ideal to avoid sensationalist, but misleading, average pay-gap statistics, and instead discuss the respective roles of attitudes, preferences, cultural norms, and policies in shaping economic and social opportunities for women.
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