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January 29, 2015

Gender pay gap increases with age

Women consistently earn less than their male counterparts on average throughout their lives, with older female workers experiencing a larger wage gap than younger workers.

A recent report from financial services firm Wells Fargo shows that the earnings gap has narrowed for all women over 25 since the 1990s, but remains wide for women of all ages.

The largest gap can be seen over the age of 45, where women are likely to earn around 25% below male earnings.

Wells Fargo suggests that this discrepancy can be attributed to the fact that women tend to select lower-paid industries, and are more likely to work fewer hours than their male counterparts due to larger family responsibilities.

The report also notes that younger men aged 25-34 have lower labor force rates than previous generations, whereas the participation rate among women has remained consistent.

Solomon W. Polachek writes in detail about the persistent gender wage gap. He notes that this is generally decreasing in most countries, but that this process could gain momentum with policies which increase women’s incentives to work. He suggests repealing marriage taxes and promoting high-quality day care.

Read the report here.