Flexible workdays close gap in gender pay

Salary differentials between the sexes exist because companies tend to reward staff who labour long hours and work particular hours

PUBLISHED : Tuesday, 07 January, 2014, 1:46am
UPDATED : Tuesday, 07 January, 2014, 3:35am

Pay differentials between the sexes could be erased if more companies offered a flexible work schedule to their employees, according to results of a study by a Harvard economist.

Gender salary differentials "would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who laboured long hours and worked particular hours", said professor Claudia Goldin.

Goldin was seeking to explain why 25- to 69-year-old women working full-time made 77 per cent of what men earned. The median pay gap expanded with age and differed by occupation, yet it was smaller than it once was as women had become more educated and worked more, she said at the annual meeting over the weekend of the American Economic Association.

The pay difference in industries with more flexible work schedules, such as technology, science and health, was smaller than in those with more rigid workdays, including financial and legal professions, the study found.

Women seeking flexibility in work to have and raise children, for example, came at a "high price", Golding said. "Quite simply, the gap exists because hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous," she said in her paper, titled "A Grand Gender Convergence: Its Last Chapter".

Goldin cited research that found that while women graduating from the University of Chicago Booth School from 1990 to 2006 with master's degrees in business administration earned almost the same as men, in later years they made just 55 per cent as much as their male counterparts.

Career interruptions and differences in hours worked explain much of the gap, she said.

The study meant that if the gender pay gap was to be closed, workers must obtain greater autonomy in determining their schedules, said Goldin.

"What the last chapter must contain for gender equality is not a zero-sum game in which women gain and men lose," she said. "Many workers will benefit from greater flexibility."