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Sorting across workplaces, and unequal rewards within them, are major causes of the gender wage gap
In most developed countries, women have closed the gap in educational attainment and labor market experience, yet gender wage gaps persist. This has led to an increased focus on the role of employers and employment practices. In particular, research has focused on the types of workplace where men and women work, their promotion prospects and the extent to which they are rewarded differently for similar work. Understanding the relative importance of these features, and the mechanisms that generate them, is necessary to design effective policy responses.
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Firms interested in workplace diversity should
consider the post-hiring stage and why some minority employees choose to
leave
While many firms have recognized the importance
of recruiting and hiring diverse job applicants, they should also pay
attention to the challenges newly hired diverse candidates may face after
entering the company. It is possible that they are being assessed by unequal
or unequitable standards compared to their colleagues, and they may not have
sufficient access to opportunities and resources that would benefit them.
These disparities could affect the career trajectory, performance,
satisfaction, and retention of minority employees. Potential solutions
include randomizing task assignments and creating inclusive networking and
support opportunities.
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Despite increasingly generous parental leave
schemes their advantages over subsidized childcare remain unclear
There is growing agreement among parents in
high-income countries that having a working mother does not harm a preschool
child. Yet, research is ongoing on what the long-term effects on children
are of being looked after at home (primarily by their mothers) or in
childcare. Most studies find positive effects of childcare on child outcomes
for children from disadvantaged backgrounds and moderate effects for
children from more advantaged backgrounds. Policymakers need to improve
compensation and the working environment for the sector if a high quality
level is to be achieved and if the beneficial effects are to be
maintained.
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Additional female educational attainment
generally lowers fertility, but the relationship is complex
The negative correlation between women's
education and fertility has been observed across regions and time, although
it is now weaker among high-income countries. Women's education level could
affect fertility through its impact on women's health and their physical
capacity to give birth, children's health, the number of children desired,
and women's ability to control birth and knowledge of different birth
control methods. Each of these mechanisms depends on the individual,
institutional, and country circumstances experienced. Their relative
importance may change along a country's economic development process.
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An unequal distribution of resources within the
family is a special concern for female poverty
Transition to a market economy is accompanied by
a period of greater economic uncertainty. Women are likely to suffer
substantial disadvantages from this uncertainty compared to men as they are,
for example, more likely to lose their job. This not only implies a monetary
loss for the entire family, but also degrades female bargaining power within
the household, possibly further aggravating their well-being. When
intrahousehold inequality—an unequal distribution of resources among family
members—exists, female poverty might be significantly larger than what can
be deduced using standard household-based poverty measures.
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Belief in the existence of gender differences in
risk attitudes is stronger than the evidence supporting them
Many experimental studies and surveys have shown
that women consistently display more risk-averse behavior than men when
confronted with decisions involving risk. These differences in risk
preferences, when combined with gender differences in other behavioral
traits, such as fondness for competition, have been used to explain
important phenomena in labor and financial markets. Recent evidence has
challenged this consensus, however, finding gender differences in risk
attitudes to be smaller than previously thought and showing greater
variation of results depending on the method used to measure risk
aversion.
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How and why do the careers of men and women
differ? What policies could reduce the differences?
The gender wage gap is largely due to men and
women holding different kinds of jobs. This job segregation is partly driven
by gender differences in careers in corporate hierarchies. Research has
shown that the careers of men and women begin to diverge immediately upon
entry into the labor market and that subsequent career progress exacerbates
the divergence. This divergence of career progress explains a large part of
the gender wage gap. Understanding how and why the careers of men and women
differ is necessary to design effective policies that can reduce the gender
differences in hierarchies.
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Gender inequalities in daily time allocation may
have detrimental effects on earnings and well-being
Many countries experience gender differences, of
various magnitudes, in the time devoted to paid work (e.g. market work time)
and unpaid work (e.g. housework and childcare). Since household
responsibilities influence the participation of women, especially mothers,
in the labor market, the unequal sharing of unpaid work, with women bearing
the brunt of housework and childcare, is one of the main drivers of gender
inequality in the labor market. Understanding the factors behind these
gender inequalities is crucial for constructing policies aimed at promoting
gender equality and combating gender-based discrimination.
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Parental leave increases the family–work
balance, but prolonged leave may have negative impacts on mothers’
careers
Numerous studies have investigated whether the
provision and generosity of parental leave affects the employment and career
prospects of women. Parental leave systems typically provide either short
unpaid leave mandated by the firm, as in the US, or more generous and
universal leave mandated by the government, as in Canada and several
European countries. Key economic policy questions include whether, at the
macro level, female employment rates have increased due to parental leave
policies; and, at the micro level, whether the probability of returning to
work and career prospects have increased for mothers after childbirth.
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Family-friendly policies increase women’s labor
force participation, benefiting them, their families, and society at
large
Female labor force participation is mainly
driven by the value of their market wages versus the value of their
non-market time. Labor force participation varies considerably across
countries. To understand this international variation, it is important to
further consider differences across countries in institutions, non-economic
factors such as cultural norms, and public policies. Such differences
provide important insights into what actions countries might take to further
increase women's participation in the labor market.
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