Elevator pitch

Despite equal pay legislation dating back 50 years, American women still earn 18% less than their male counterparts. In the UK, with its Equal Pay Act of 1970, and France, which legislated in 1972, the gap is 17% and 10% respectively, and in Australia it remains around 14%. Interestingly, the gender pay gap is relatively small for the young but increases as men and women grow older. Similarly, it is large when comparing married men and women, but smaller for singles. Just what can explain these wage patterns? And what can governments do to speed up wage convergence to close the gender pay gap? Clearly, the gender pay gap continues to be an important policy issue.

Key findings

Pros Policies promoting greater daycare utilization reduce the gender wage gap. Policies aimed at increasing women’s lifetime work can reduce the gender wage gap. The gender wage gap is smallest between single men and single women. The gender wage gap is decreasing in most countries. Cons Audit studies designed to “catch” employers in the act find little evidence of gender discrimination. Impact studies of the effects of anti-discrimination policies find little effect on reducing the gender wage gap. The gender wage gap is largest (typically around 25%) between married (or cohabitating) men and women with children. Equal pay legislation has not been effective in eliminating the gender pay gap.