The Gender Earnings Gap

The Gender Earnings Gap

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Updated February 21, 2024
The Gender Earnings Gap
Women earn less, on average, than men. This earnings
Table 1. Select Worker Characteristics, by Sex
differential—often called the gender earnings gap—raises

questions about gender equity in labor markets, women’s
Men
Women
retirement security, and the potential impact of the gap on
Share of Workers:
1972 2022 1972 2022
national economic performance, among others. This
With at least a high school
InFocus identifies factors that contribute to the gender
34% 92% 28% 96%
diploma or equivalent
earnings gap and may be relevant to congressional
consideration of proposals to support equitable labor market
With at least a bachelor’s degree
8% 41%
5% 49%
outcomes for women and men.
Employed at ful -time hours
97% 94% 78% 84%
Figure 1. Ratio of Women’s to Men’s Median Annual
Employed at least half the year
Earnings, 1972-2022
96% 97% 88% 96%
(27 weeks or more)
Ful -Time, Year-Round Workers
Employed in a managerial job
18% 16%
6% 14%
Employed in a professional job,
13% 23%
7% 25%
excluding nurses and teachers
Source: CRS analysis of Current Population Survey, Annual Social
and Economic Supplement data from survey years 1973 and 2023.
Note: Analysis restricted to non-military wage and salary workers,
ages 25-64, employed at the time of survey.
Researchers have applied statistical techniques to large-

scale survey data to separate the observed gender earnings
Source: U.S. Census Bureau, Historical Income Tables, Table P-40.
gap into its explained and unexplained portions.
Note: A ful -time, year-round worker is a person who worked 35 or
more hours per week and 50 or more weeks during the previous
• The explained portion accounts for observed gender
calendar year.
differences in factors that affect wages (e.g., education,
occupation, work experience), assuming that those
Figure 1 plots the ratio of women’s to men’s full-time, full-
attributes are equally valued for men and women (i.e.,
year annual median earnings from 1972 to 2022, using U.S.
an MBA has the same value to an employer regardless
Census Bureau data. This ratio is a summary measure of the
of the degree-holder’s sex).
gender earnings gap, which in practice takes on a range of
values that vary across occupations and worker
• The unexplained portion is the gap that remains when
characteristics. Nonetheless, Figure 1 illustrates several
observed characteristics are taken into account (i.e., the
points of interest:
portion of the gap that cannot be explained by observed
•
differences in education, work experience, occupation,
women’s median annual earnings are lower than men’s
or other worker or job characteristics).
throughout the entire 1972-2022 period;
•
One interpretation of the unexplained gap is that it
the ratio of women’s-to-men’s median annual earnings
measures sex-based discrimination. Although research
rose rapidly in the 1980s and 1990s, followed by a
suggests discrimination is a component, the unexplained
period of slower growth; and
gap plausibly measures the impacts of many factors. This is
•
because the data that have been used to estimate the
starting around 2013, growth in the ratio increased, and
explained and unexplained earnings gaps are limited in their
in 2022, women’s median annual earnings were 84% of
men’s, representing a
capacity to fully capture worker attributes that could affect
16 percentage point gap.
earnings. For example, although most labor force surveys
The Explained and Unexplained Gap
collect information on a worker’s education, occupation and
industry of work, and weekly work hours, many individual
Part of the earnings gap shown in Figure 1 can be
characteristics (e.g., technical knowledge, competitiveness,
attributed to differences between men’s and women’s
interpersonal skills) and employer-specific attributes (e.g.,
employment patterns and other characteristics. Table 1, for
example, illustrates select differences between men’s and
job features and requirements, provision of formal training
women’s education
and mentoring) are frequently unmeasured. As a result, the
al attainment, full-time work, and
unexplained portion of the wage gap—as conventionally
occupations in 1972 and 2022, and shows that differences
measured—will capture many things, including, potentially,
have narrowed considerably since 1972.
unmeasured worker characteristics that affect productivity,
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The Gender Earnings Gap
preferences for job amenities, differences in workers’
(e.g., in terms of where the work is performed and the
bargaining power, and discriminatory labor practices.
number and timing of work hours) may explain a portion of
the earnings gap if workers who value such flexibility are
The Explained Gap: Significant Factors
willing to accept lower pay in exchange. This theory is
A vast literature has examined the determinants of the
consistent with research on gender earnings differentials
gender earnings gap. Although there are many contributing
within high-paying occupations. These findings suggest that
factors, and their relative significance have shifted over
providing work-hour flexibility is costly for some
time, occupation differences, career interruptions, and
employers, and consequently working long hours and
parenthood stand out.
particular hours receives a wage premium (e.g., two hours
worked from 4 to 6 p.m. in the office is worth more to the
Occupation: Although occupational-segregation has
employer and compensated at a higher rate than two hours
diminished considerably, women and men—as groups—
worked from 9 to 11 p.m. at home).
continue to concentrate their employment in different
occupations, and this remains an important source of the
Wage Negotiation: General surveys and studies of specific
gender earnings gap. Relative to women, men are better
worker groups (e.g., MBA students, teachers) have
represented in certain higher-paying occupations like
documented differences in men’s and women’s propensity
managerial jobs and historically male professional jobs. For
to negotiate compensation. At the same time, some research
example, Bureau of Labor Statistics data show that, while
indicates that additional negotiation by female employees
women made up 44.9% of all full-time wage and salary
may not be effective in some situations, and women are
workers in 2022, they made up 26.3% of chief executives
limiting negotiations because they are correctly gauging
($2,701 median weekly earnings), and 79.2% of elementary
their environments. Relatedly, some studies suggest that
and middle school teachers ($1,170 median weekly
pay transparency policies (i.e., that reduce uncertainty about
earnings). There are various theories about why this may be
potential wage outcomes) may reduce negotiation
the case, including that women may select into jobs that
differences between men and women.
they can more easily return to after a temporary career
interruption or that women face additional barriers to
Discrimination and Gender Stereotypes: Research that
employment in certain fields.
explores sex-based pay discrimination tends to restrict
analyses to narrowly defined groups (e.g., orchestra
Career Interruptions: The frequency and duration of
musicians), where fewer differences between the attributes
career interruptions have changed over time, but on average
of male and female workers exist. Some of these studies
women tend to interrupt their careers more than men (e.g.,
reveal that pay differences remain after taking into account
to care for children or family members). Interruptions can
a multitude of factors, a finding consistent with the view
affect women’s earnings through several channels. Workers
that discrimination contributes to the earnings gap. In some
who switch employers after a break from employment will
cases, sex-based discrimination may be based in part on a
lose job-specific knowledge and training. Some workers
lack of information about the productive capacity or
may also trade monetary compensation for desirable job
workforce commitment of an individual worker. This may
features (e.g., work environment, flexible scheduling,
lead some employers to rely on information about average
additional training) when returning to work. Long absences
differences between men and women (i.e., statistical
may cause certain skills or job networks to depreciate,
discrimination) when making hiring, training, or other
temporarily curtailing wages while these are reestablished.
decisions. Some studies detect gender-stereotyping that
Finally, some employers may interpret an interruption as a
may put women at a relative disadvantage in hiring and
signal of lower labor market commitment, resulting in a
wage offers under certain conditions.
more challenging job search or lower wage offers. Research
suggests that even relatively short interruptions (e.g., during
Federal Labor Law and Recent Proposals
summer months when children are out of school) can
Two federal laws provide a remedy to employees who
contribute to the gender earnings gap.
believe that unlawful sex-based wage discrimination has
occurred. The Equal Pay Act of 1963, which amended the
Exploring the Unexplained Gap
Fair Labor Standards Act, prohibits covered employers
Given the limits of large-scale survey data, researchers have
from paying female and male employees different wage
used smaller-scale studies, often on special worker groups
rates for equal work on jobs requiring “equal skill, effort,
(e.g., specific occupations), to explore the determinants of
and responsibility” and performed “under similar working
the unexplained earnings gap. The literature has also
conditions” at the same location. Title VII of the 1964 Civil
evolved to consider the impact of less tangible worker skills
Rights Act provides for compensatory and punitive
and traits—like interpersonal skills, risk-aversion,
damages for intentional wage discrimination, subject to
competitiveness, and willingness to self-promote—that are
caps on the employer’s liability. Congress has continued to
important to workers’ performance and career path. A few
consider proposals that aim to increase deterrence of sex-
prominent findings suggest that preferences for flexible
based wage differences. In the 118th Congress, such
work schedules, differences in wage negotiation, and the
proposals include the Wage Equity Act (H.R. 5053) and the
persistence of gender stereotypes may matter to women’s
Paycheck Fairness Act (H.R. 17/S. 728).
relative pay.
Sarah A. Donovan, Specialist in Labor Policy
Preferences for Flexible Work Schedules: A greater
preference for flexible work arrangements among women
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The Gender Earnings Gap

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