In 2022, women earned just $0.82 for every dollar earned by men, only slightly better than 20 years earlier.
But beneath that relatively unchanging headline number and our assumptions about what’s behind it—such as occupational differences and pervasive gender bias—there’s a more dynamic narrative about wage and professional equity.
That story forms one pillar of Claudia Goldin’s Career & Family, published in 2021 and released in paperback this year. Goldin, the first woman tenured in Harvard’s Economics department, last month won the 2023 Nobel Prize in Economics for her research on gender differences in earnings and employment rates.
Career & Family is a detailed examination of the factors and trends behind wage inequality and many of the pressures on modern women and families. “Are women actually receiving lower pay for equal work?” she writes. “By and large, not so much anymore. Pay discrimination in terms of unequal earnings for the same work accounts for a small fraction of the total earnings gap. Today, the problem is different.” (p. 4)
The problem today, according to Goldin, is that women with children generally require more controllable hours than men with children, and the premium for jobs with the longest and least flexible hours has increased dramatically. She notes, for example, that a lawyer’s hourly rate can increase by almost a quarter when they go from working 30 to 60 hours per week. The more they work, the more each hour earns them.
Goldin calls such roles requiring late nights and always-on availability “greedy work,” and her research demonstrates that the gender pay gaps are greatest in occupations such as law, finance, and sales that are among the greediest of workers’ time. “Men generally opt for the jobs that have greater time demands but pay more,” Goldin notes. “Relative to women, they generally care less about the time flexibility and more about the earnings advantage.” (p. 171) One study found that men and women worked around 60 hours per week in their first few years after getting their MBAs, but 13 years later, the work week declined to 49 hours for women and 57 hours for men.
“To maximize the family’s potential income, one partner commits to the time-consuming job at the office while the other makes career sacrifices to take on the time-consuming job at home,” Goldin writes. “Regardless of gender, the latter will earn less.” (p. 14) Because of persistent gender norms that mean women in heterosexual couples are more often the primary person on call at home for children, they’re more often earning less.
As Goldin relates, heterosexual married couples are, in this context, making logical calculations to each “specialize”—with one on call at work and one on call at home—and not leave money on the table.
One striking study of Swedish couples where a wife and husband actually earned the same salary prior to a child’s birth found that the husband was earning 32% more than his wife when the child was 15 years old. Some of the women were working fewer hours, but about one-third of the gap was explained by lower hourly pay.
“Children require time; careers require time. Couple equity—a sharing of that time—could enable them to achieve both career and family,” Goldin writes. “But couple equity…is really expensive and is part of the reason for the continued gender earnings gap.” (p. 150)
What can be done?