How can we solve the gender pay gap?

Jane Garvey: I felt a prat and I felt that I'd been stitched up but then I realised, of course, this is a much wider problem. It wasn't just about me and Jenni Murray, who was the other presenter of Woman's Hour at the time. It was about women's contributions to the BBC being undervalued and underrated.

Anna Bevan: That’s broadcaster Jane Garvey, talking to me about the moment she realised she was a victim of the gender pay gap, while - ironically enough - presenting the popular BBC radio programme Woman’s Hour, which has literally been talking about the gender pay gap since 1947.

Welcome to LSE iQ, the podcast where we ask social scientists and other experts one intelligent question. I’m Anna Bevan from the iQ team - we work with academics to bring you their latest ideas and research, and talk to people affected by the issues we explore. In this episode, I’m asking: How can we solve the gender pay gap?

We’ll be hearing more from Jane about how she unwittingly became a campaigner for equal pay; Nina Roussille describes how the gender pay gap begins in preschool, and Camille Landais explains why increasing parental leave isn’t always the solution.

On average across the globe, for every pound earned by a man, a woman earns around 80 pence.

But despite huge advances in access to education, the labour market, and the introduction of the Equality Act of 2010, which guarantees equal pay for men and women doing the same job - those figures have pretty much remained the same for the past two decades.

Still, the gender pay gap - the difference between the average earnings of men and women - endures. So, how can we solve it?

Pay transparency – making salary data public - is one approach.

In 2017, the UK introduced mandatory gender pay gap reporting for companies with more than 250 employees. This prompted the BBC to publish its first gender pay gap report. The results? Men were earning on average 9% more than women; only a third of the corporation's highest paid on-air stars were female and the top seven highest on-air earners were all men. I asked Jane Garvey how she felt when she found out male colleagues were being paid more than her.

JG: Oh I was quoted by The Daily Mirror as being ‘incandescent with rage’. And I think that's probably right. And I just felt that I was in this bizarre position of being, very proudly being, a presenter on Woman's Hour, which is a much-loved institution of a show on Radio Four. And it had been going on since 1946. So it's one of the oldest still running radio programmes on this planet. And it had over the years tackled any number of important issues affecting women and families, including the gender pay gap. And it had first talked about it in 1947. So for it then to be revealed that the presenters of this doughty mainstay of the schedule, which was all about women and women's lot, that we were not being paid as much as the male presenters on other programmes equivalent to Woman's Hour or of much less significance than Woman's Hour was really actually upsetting is probably the right way of putting it. It felt like an, almost like a physical pain, and perhaps I’m just exaggerating it.

AB: After those figures were published, Jane wrote an open letter to the BBC calling for equal pay,which was signed by more than 40 of the corporation’s female stars. I asked her if it was deliberate that all of these signatories were women.

JG: Do you know, one of the disappointing things about this whole business is that very few men spoke up for us, very few men. I have to say some did. But the overwhelming majority of very well-paid male presenters at the BBC chose to do and say nothing about this issue in spite of the fact that many of them were well known officially for taking on authority and having no qualms at all about, you know, attacking the establishment and having a go at politicians. But interestingly, when it came to having a word with their own employer about what was happening within their own organisation, they didn't do anything.

AB: And do you think that allyship in that sense can really help?

JG: Absolutely it can, Yeah. I mean, because I know it sounds farcical, but a lot of these men were married to women.

And I hate the fact that men who have daughters get all sorts of credit for it - they often start a sentence with ‘as the father of daughters’. And that doesn't give you a special reason to care about equality. You should care anyway. But we do know that a lot of these men will have had daughters who might well have felt that they had they absolutely did have skin in the game, but we've all got skin in the game and I, I was always very well aware at the time of that open letter that we were we were always going to be attacked because we were privileged, middle-class, educated women who'd worked for an organization that was highly respected, well thought of. And in the majority of cases we were probably all earning what most people would think of as a properly good, more than decent salary. But that wasn't the point because we were not earning as much as men doing equivalent roles within that organization.

AB: For years, Jane had been covering stories about pay discrimination and organisations essentially valuing women less - Birmingham City Council, for example, was forced to declare bankruptcy last year largely due to a landmark court ruling back in 2012. That found that hundreds of mostly female employees working in roles such as cleaners and catering staff had missed out on bonuses that staff in traditionally male-dominated roles such as bin collectors and street cleaners had received.

So it may seem like mandatory gender pay gap reporting has a real impact. After all, it led to Jane getting a pretty hefty pay rise:

JG: I think it was probably within about six months of that letter, I was given this £40,000 a year overnight pay rise.

AB: But that’s not normally the way it works. Auditing giant KPMG recently described the reporting regime as having had a limited impact – mainly because there aren’t really any consequences for businesses who don't accurately file their figures on time.

Nina Roussille is an Assistant Professor of Economics at MIT, and the Executive Director of LSE’s Hub for Equal Representation, which focuses on improving representation of women and minorities at work. She believes the gender pay gap starts before women even enter the workplace.

Nina Roussille: It's been shown for quite a while that knowing how much to ask for really matters. In particular, it's been sort of thought through that women have negotiated less in the past, than men have, but it hasn't been empirically shown how that impacts the salary offers that they're getting from employers. And so this is what my story is about. My story is about are women asking for less than men, even with very similar sorts of resumes. And to what extent does that impact the salary offers that they are getting from employers?

AB: Nina calls this the "Ask Gap". She looked at women in high-paying occupations in the tech sector in Silicon Valley – who, crucially, were able to negotiate their own salaries. It’s a niche sector, but, as Nina argues, it's an important one for the economy. Working with a hiring platform called Hired.com, Nina analysed how much money women were asking to make in their next job compared to men with comparable CVs.

NR: Right off the bat, women are asking for around 3 % less than men. That is if I look at a man and a woman with very similar resumes on the platform, the women is on average asking for 3 % less. Now, you know, you might ask yourself, is 3 % small or large? One thing to keep in mind again is this is high paying jobs. So the average salary on the platform is going to be around $120,000. So even 3 % of that, if you do the calculation in your head, is going to get us close to five thousand dollar and there's a lot of it originated by experience with the most experienced women having the largest gaps. So if you go all the way to women with more than 15 years of experience compared to men with the same experience, that gap goes all the way to close to six percent, which, you know, gets us above the ten thousand dollar bar. So that's, you know, a significant amount of money. And what I find then is that gets entirely reflected into the offers that the firms are making. So there is about a gap of the same dimension in the offers that firms are making between men versus women. And you can explain 100% of this gap by the differences in ask between men and women.

AB: Why do you think it is that women are asking for less?

NR: Right. To kind of answer that question and also to define a more sort of a cleaner relationship between the ask and the bid on the platform, what we did is essentially run a quasi-experiment on the platform. What happened is we kind of changed the way that candidates were entering their ask salary when they were creating their profile.

AB: When Nina first started looking at data from hired.com, candidates were required to fill in an empty box with their desired salary. And, as she told us, she found that women were asking for 3 % less than men.

Fast forward a little bit, hired.com replaced the empty text box with a suggested median amount tailored to the candidate’s profile. And what happened? Women and men started asking for the same salary.

Here’s Nina again:

NR: So, essentially, post this reform, the gender gap between men and women in ask salary went to zero and kind of, encouragingly, the gap in offers also went to zero. And I want to pause here and say, what does this tell us that women, you know, sort of adjusted upwards their ask in response to this suggestion? That tells us that we can rule out a number of stories that people may have come up with as to why they were asking for less in the first place. For example, it's traditionally said, you know, women maybe prefer lower paying jobs, quote unquote, because they have different amenities. Women are asking for less because they would like more family-friendly job amenities or more flexibility. Another story is something like women are too risk averse. Here again, the very fact that faced with information, women went all the way to asking for the same as men, sort of tells us that these stories, at least in the context that I study, are not biting. And so what are we left with? I think the most sort of obvious interpretation of the result, although I can't fully prove it, is that women didn't have the information that men had (in the context I'm studying) to ask for the right number. One thing to have in mind that maybe helps give color to that statement is that this is again, software engineers for the majority of people on that platform. And the gender divide there is like 80 % men, 20 % women. That's true of software engineers. That's true in a lot of high paying positions. So basically arriving in those high paying positions, women are at a disadvantage if we think networks, you know, men sort of like, exchange information with men, women exchange information with women. And it creates these silos of information where women just don't have the right access to know what to ask for. And so in this context, information is a way to sort of level the playing field.

AB: Yeah, for sure, information and I guess transparency.

NR: Now that you said the word ‘transparency’ is very interesting, because that's a broader policy topic that's very much at the forefront of the policy conversations right now. Right. If we look at the US, about half of the states at this point over the last few years have passed salary transparency laws, where they say to employers: actually moving forward, when you post a job on a job platform or on your website, you're going to have to give a salary range , how much you're willing to pay for that job.

AB: So, you know when you apply for a job and there’s no salary listed, or a really vague salary range? Well, that could become a thing of the past. And not just in the US. From 2026, companies in the EU will also have to be more transparent about pay. And this could have big implications for the gender pay gap because whilst not everyone can negotiate their salary, what Nina is saying here is that ambiguity can maintain the gender pay gap. I asked her if there were any other factors at play:

NR: So one thing to highlight is the Ask Gap explains the entirety of the gender gap in offers for men and women that have a similar resume. Now, what is true is that men tend to be in higher paying jobs. Like, for example, on the platform, but that's true in the broader economy. Women, if anything at this point, are more educated than men.

What is true as well though, is that women tend to select into lower paying majors. So they are more likely to have a college degree, but that college degree is more likely to be in Psychology or the Humanities in general that are, you know, on average, lower paying than say Computer Science, where men are much more likely to be represented than women. So we can hold both of these truths. Women have sort of caught up on the education gap. They're still selecting into lower paying majors and so that does mean that to some extent these differences in occupations are explaining part of the gap. Now one thing I'll say is you know ‘selecting in to’ sounds like you know it's purely their choice or their preference which I'd like to say it's not. It's an entire you know gender norm construct that is built around you know like women are there for like care for example so then we find more women in the humanities or sort of in the healthcare sector. So this isn't to say no women choose to be lower paid. This is to say at the moment the way that gender norms are constructed and some of the preferences are revealed is that women select into these lower paying sectors.

AB: And how do we change that in society?

NR: it's a complicated question. Certainly you don't want to mess with people's preferences, but you do want to make sure that they're not making those choices in response to a norm. I think it starts very early. There's a lot of studies showing that women are just as good as men at math very early on, but also that quite early on, they are sort of discouraged to follow studies in math that women sort of get worst feedback on those, on those tracks. So it starts as early as, you know, preschool, middle school, like, there's a lot of sort of constructs that need to be, stripped away for women to feel like they can make their choices unbounded by, gender norms. Our focus should be early on in the education sector, making sure that bias isn't permeating the class.

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AB: For Nina, it’s not just salary transparency that is crucial to solving the gender pay gap. It's also about challenging gender stereotypes in the classroom.

Camille Landais is a Professor of Economics at LSE. He believes women are punished for having children.

Camille Landais: Women are never going to recover from the arrival of kids compared to what would have happened in the absence of kids or what would have happened if they were just like men. And what you see in pretty much every developed country today is that there is a massive impact of the arrival of the first kid on the careers of women and not on men.

AB: Camille and his team analysed data from 134 countries and investigated how women’s pay across the globe is impacted by having children. They initially looked at a couple’s earnings just before they had a child, just after they’d had a child and then at various intervals years later. They found that in almost every country on the planet, the birth of a child has a large and persistent impact on female employment - with women tending to change their working hours, their salaries and even transitioning to new jobs - while male employment went largely unaffected. This effect is called the Child Penalty and varies considerably from country to country. I asked him if he thought the Child Penalty entirely explained the gender pay gap.

CL: There are a lot of factors at play and I don't want to minimise the importance of dealing with discrimination in the workplace or all kind of things that might differentially affect not just pure labor market outcomes, earnings, but just the overall experience of being at work or the experience of life of men relative to women.

But what's really interesting is that I think today we can trace back a lot of the overall level of gender inequality to really that strong divergence that happens at the moment of family formation.

If you take women that are actually having much better career prospects, they still bear the child penalty, even though from the point of view of economics and the economics of specialization, it makes no sense.

AB: Historically, if a woman was earning less than her husband – and let’s face it, she probably was – it would make more economic sense for her to quit her job and stay at home with the children. However, nowadays that argument doesn’t hold true. Women who earn more than their partners are still predominantly the ones who cut back on work to raise a family, while their partners continue with their normal working pattern. Here’s Camille again:

CL: So what that tells us is that there is something deeper about the way we believe our gender identity and our gender roles are formed. And in that respect, what I find fascinating is to try to understand when exactly do we start making this kind of strong formation of beliefs around what it is to be a father, what it is to be a mother?

It is clear that they get formed relatively early on and that your own experience as a child growing up and essentially what happens in your own household, looking at your parents is extremely formative in terms of these beliefs.

AB: Do you think it's as simple as some women wanting to work less after they have a child rather than being forced to or impacted by societal norms?

CL: You are here making a very important point, which is we call it a ‘Penalty’, because again, what we're referring to is a penalty in terms of labor market outcomes. But is it a penalty in terms of well-being, in terms of life satisfaction? What's really interesting is that if you just look at life satisfaction data around the arrival of kids, you do not see a drastic divergence between fathers and mothers.

So it would be easy to say, well, you know, maybe the penalty is not a penalty. After all everybody's happy and it seems like it's an arrangement that suits everyone. It's easy to just look at life satisfaction and stop there and say, well, you know, there is no such thing as mental health burden and stuff like that even though people talk about it. We shouldn't care about this. This is not true. When you look at the data, you do see that the burden on women is much larger and that has real consequences on their lives. Why? Well, because you can just start looking at time use and you see that indeed there is a massive decrease in leisure time relative to men at the moment of the arrival of kids.

There is an increase in active time, a decrease in sleep. Okay. So clearly there is something that changes the allocation of your time in a way that is not trivial and it's not like, I'm working less, but I take more childcare. No, no, everything is more demanding on women at the moment kids arrive because it's not just childcare, it's also like household chores and so many different activities that essentially fall more onto women.

And then when you translate these differences in terms of time use, this decrease in leisure, this decrease in sleep, you see actually an increase in stress and you see an increase in mental health issues. Clearly there is actually a real penalty on women.

AB: For Camille, the Child Penalty impacts more than just the workplace – it also seeps into housework and leisure time. And is less to do with biological differences between men and women and more to do with gender identity and societal expectations. I asked him if the child penalty is different in same sex couples.

CL: This is something that we can look at in just a few countries. So it's going to be Norway, Sweden, Scandinavia. There what's really interesting is that the parental leave is going to be so there's going to be a maternal leave for the biological mom in the lesbian couple.

So you can really look at the biological mom versus the one that didn't bear the child. Yet, there is absolutely no difference in the impact that the arrival of kids has between these two mothers in a lesbian couple. What that means is that, yeah, sharing is possible in a lesbian couple; there is almost perfect sharing.

I don't want to make too much of these results because it's not that we have a lot of these homosexual male couples, but what we see there is actually no penalty for neither of the fathers. Okay. So what that means is that when it comes to men in an homosexual couple having kids, they do not take the burden of care.

It seems like they essentially externalise it through nannies and other forms of childcare. So, sometimes you could say, it's also a form of sharing, but it's a radically different form of sharing where you rely much more on external sources of childcare.

AB: Now, as Camille said, there isn't a huge amount of data on the impact of children on same sex couples. But from what he has seen, it points to the need to reinvent the labour of how parenting is shared in heterosexual couples. I asked him whether he thought employers becoming more flexible as a result of COVID might help.

CL: I think there are essentially two views. The first view is the view that what's going to essentially help women is bringing more flexibility to the workplace. The idea that what is at the heart of the Child Penalty is the inability to combine work with childcare. And the more flexible you make the workplace, the easier it's going to be for women... if indeed they need to take the bulk of childcare.

My view is a little bit different. I'm thinking that a lot of the problem is not necessarily that you need women to be able to combine work with childcare. It's just that we have a fundamental problem with the allocation of childcare within the couple. And if you don't address this, there is only just so much you can do at some point. Yes, you can make the workplace as flexible as you as you want, but you know there's going to be an incompatibility you cannot have at the same time women taking all the childcare and continue to work. If you want to address the child penalty, you need to address the unequal burden of care and of childcare within the couple.

And that totally changes views in terms of what type of actions you want to take also as a policymaker, because what you want to address is the social norms around specialisation. You want to address the legislation that essentially creates strong norms around who should take care of kids. In a world where you design, for instance, parental leave policies that explicitly give more parental leave to women compared to men, you're essentially making it clear that the implicit norm of society is that, yeah, a much larger share of the burden of childcare should be on women.

AB: And so who has the power to change that? Who has the power to fix it?

CL: We do. We do. We collectively have not only the power but the responsibility to do that for our kids, for our sons and daughters, to educate them better. Yeah, I think it's a question of collective choice.

We can do it, ok? We should not expect it to just be a natural process. There is no natural force, okay, in the structure of our economies or the structure of our societies that is going to make the gender gap just close.

Again, why? Because the social equilibrium that we've created is one in which there is no fundamental incentive for this allocation of the burden to change within the household. What we see is that change is possible, okay? It's just a question of willingness to make it happen and with a real effort, a set of combined big push policies where we would make it very clear that we make it a national priority to actually change this allocation of the burden of care.

And yeah, that requires quite a lot of effort from the point of view of policymakers in terms of setting expectations, education of young children - within the household as well - support of childcare and so on. And so forth. So yeah, it's it's quite a big push and you need a lot of willingness and desire from policymakers to put it on top of the agenda. But I think we can solve it.

AB: I asked Nina Roussille how she thinks we can end the gender pay gap:

NR: I think it's a multi-pronged approach. The number one question, and Camille would be happy that I side with him, is I think a lot of it still has to do with the arrival of a child and how that sort of reshapes the priorities on the career of women in a way that it doesn't at all for men. And so, and this is all channeled by gender norms. It's that expectation that women are that primary caregiver. And so I think moving forward, a lot of the questions we have to ask ourselves is how malleable are these gender norms? Who should be trying to impact them? Is it something that can be led by policy? Is it something that needs to come from people themselves and can't be sort of like shifted by policy? It's a really difficult question, but if we ask ourselves what's the root cause, it is those gender norms. And so trying to research to what extent, are they malleable and can we change them? I think is really important.

AB : Jane Garvey also agrees that tackling gender norms early on and reassessing the value we place on certain roles is key.

JG: As I understand it, what lies at the heart of the problems at some of the major councils in the UK is that women were doing jobs that were undervalued relative to the to the male jobs traditionally associated with men. And that's where it starts, isn't it? That men have skills that we as a society choose to value more?

Well, I know that carers, for example, people who work in social care do one of the most important jobs in our society, but they aren't valued financially in the same way as a man who, and I'm not demeaning this in any way, a man who can fix your electrics or sort out your plumbing. Where do we start this conversation?

We probably have to start at primary school: starting early on, by acknowledging that the work traditionally done by women is as important as the work traditionally done by men.

So wiping bottoms or cleaning windows. What is the most important thing? Maybe we could change things by having more women cleaning windows and more men wiping bottoms. That sounds really crude, but that's sort of where we are. And if we don't, if we don't change the way we think about what sort of work suits women and men, then I'm not sure we're ever going to get this solved.

This episode was produced and edited by me, Anna Bevan, with help from Sophie Mallett. If you'd like to find out more about the research in the episode, please head to the show notes. If you enjoy LSE IQ, please leave us a review. Coming next on LSE iQ: Sue Windebank and Charlotte Kelloway ask, ‘What's it like to win a Nobel Prize?'