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Figure 2. Adding measures of skills does little to reduce the unexplained gender gap
Brookings Now

Charts of the week: The gender wage gap

In this week’s edition of Charts of the Week: the U.S. and global gender wage gap. Research shows that closing the wage gap between men and women would lead to better economic performance and quality of life for women and their families, and this can all be done through investments in educations and transparency.

The gender wage gap is closing, but its impacts are still felt by women

In the U.S., the gender wage gap fell from $9 per hour in 1979 to $3 per hour in 2016. However, Jay Shambaugh and Ryan Nunn of the Hamilton Project argue that women are still being left behind in the labor market by this wage gap despite the rate of women pursuing and completing higher education. When controlling for age, race, education, and occupation, women still earn 85 percent of what men do. Governments and employers must examine their child-care and family leave, taxation, and pay transparency policies, among others, if this gap is to truly close.

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Even when controlling for skills, the global gender wage gap persists

Studying the global gender wage gap, Dileni Gunewardena, Elizabeth King, and Alexandria Valerio found that even when controlling for skill and education levels, the disparity remains pervasive. To continue closing this divide, governments must invest in schooling for women and girls, and activity work to create equity.Figure 2. Adding measures of skills does little to reduce the unexplained gender gap

Women’s participation in the labor force adds to the economy, but only without a wage gap

Over the past 50 years, the prime-age male employment rate has declined 10 percent, and currently there is a large number of highly educated women not working who could help to close the skill gap in the labor market. But why are they not working? Eleanor Krause and Richard Reeves suggest that this is because of the gender wage gap, and that if this gap is reduced, a vast amount of money could be injected into the economy and family’s pockets.

Julia O’Hanlon contributed to this post.

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