{"id":895,"date":"2024-04-17T13:45:31","date_gmt":"2024-04-17T11:45:31","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=895"},"modified":"2024-05-27T19:47:14","modified_gmt":"2024-05-27T17:47:14","slug":"what-the-data-on-women-do-not-show-us","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2024\/04\/17\/what-the-data-on-women-do-not-show-us\/","title":{"rendered":"What the data on women do not show us"},"content":{"rendered":"

How are gender differences in the labor market measured? How to interpret data on income disparities between men and women? Does it make sense to talk about different choices and preferences when it comes to labor market outcomes? What happens when a child is born?<\/span><\/i><\/p>\n

Walking to my office in London these past weeks, I pass by two buildings named after Millicent Garrett Fawcett and Emmeline Pankhurst. Seeing their names and life-sized photos behind the glass daily, along with other suffragettes who fought for women\u2019s voting rights in the UK, triggers thoughts about the role women hold today in the economy, society, and particularly in the labor market. Things have changed since the suffragettes\u2019 times, but the numbers are only partially comforting.<\/span><\/p>\n

World, Europe, Italy<\/b><\/h3>\n

World Bank data show that globally, for every 100 men participating in the labor market, there are 69 women<\/span>. In 1991, there were 67. Over thirty years for just two more women. <\/span>In Europe, it is 78 women per 100 men, but when we look at Italy, the figure is closer to the global average: 70 women for every 100 men<\/span>. After Covid, Italy achieved record-breaking female labor participation rates, hitting an all-time high. How high? Just over 52%, nearly 20 percentage points lower than men. Despite a record figure, <\/span>only slightly more than one in two women works in Italy<\/b>. In Finland, it is three out of four. In Spain, closer to us, it is two out of three. Women are less present in the market but carry more overall workload.\u00a0<\/span><\/p>\n

Hidden behind average data are stark differences in the Italian market on at least four fronts. Geography, with the South stagnant at 34%, a figure the North reached in the late 1970s. Age: younger women are more active in the labor market \u2013 but this also applies to men. Between 30 and 34 years, the employment rate gap between men and women is even higher than the 15-64 age range. Therefore, new generations entering the labor market won\u2019t be enough to erase significant disparities. Education: Claudia Goldin, the 2023 Nobel Prize in Economics, sees education as one of the key elements of the \u201csilent revolution\u201d that led to a massive influx of women into the American labor market in the 1970s. In Italy, the female employment rate is just under 80% for those with tertiary education but does not exceed 30% for those with primary or lower secondary education \u2013 one of the lowest in Europe. There is a strong \u201cpositive selection\u201d in the labor market:<\/span> mostly highly educated women with higher income potential participate in the labor market<\/b>. Lastly, having children: motherhood remains a critical moment for working women. Many quit. According to a study by Marta De Philippis and Salvatore Lo Bello, economists at the Bank of Italy, <\/span>women\u2019s likelihood of leaving the labor market doubles after the birth of a child<\/b>. INAPP (Italian Institute for Public Policy Analysis) survey data indicate that nearly one in five women (18%) aged 18 to 49 stops working upon having a child.<\/span><\/p>\n

But what about earnings?<\/b><\/h3>\n

Employment differences between men and women are just one part of the story. The other relates to wages. While the former can be assessed by \u201ccounting heads,\u201d the latter requires choosing the measure that best reflects the different earning opportunities for men and women. Hourly wages? Monthly salaries? Annual labor income? Starting with hourly wage, the number most often cited to measure the gender pay gap, Eurostat 2022 data show a 12.7% disparity between male and female wages in the European Union and 4.3% in Italy: <\/span>if a man earns an hourly wage of 100 euros, a woman\u2019s is 95.70<\/b>. One might conclude Italy is committed to wage equality, but the number is hiding something. It is the \u201cpositive selection\u201d or \u201ccomposition effect\u201d behind the relatively small wage <\/span>discount<\/span><\/i> for Italian women compared to other countries. <\/span>If all men work, while only higher-educated and higher-earning women do, it is as if we are comparing top students\u2019 grades with those of the entire class. <\/b>Italy\u2019s low female employment inevitably skews the comparison.\u00a0<\/span><\/p>\n

We might want to correct this differential, that is, take into account different characteristics of male and female workers that can affect their salaries: it is indeed important to compare \u201csimilar\u201d individuals\u2019 wages. Education level used to be a key factor in explaining why men had higher earnings: men were more educated than women. This has not been the case for decades, but other factors can explain the differences. For example, the field of study: computer science or philosophy? Occupation: engineer or teacher? Experience: how long and uninterrupted is the work career? Work sector: hospitality or finance? The company\u2019s productivity level: is it high or not? Accounting for all these factors certainly narrows the wage gap between men and women, getting closer to economists\u2019 definition of discrimination: different pay for equal productivity. It also leads some to argue that there is no gender pay gap, let alone any form of discrimination, as differences are the result of different choices made by men and women.<\/span><\/p>\n

Choices and constraints<\/b><\/h3>\n

The response to this argument comes from Shelly Lundberg, an economist at the University of California, Santa Barbara. She reflects on the meaning of the term <\/span>discrimination<\/span><\/i> between men and women in a recent article. She notes that economists\u2019 view of individual choices has evolved, especially with the growth of fields like behavioral and cultural economics. There is now greater focus on the social context and emotional content of decision-making compared to the traditional view of individuals as fully rational agents. Nevertheless, gender discrimination analyses, or more generally, the differential treatment of men and women, struggle to move beyond old stereotypes. Returning to the earlier example: <\/span>do women choose to be teachers, have more discontinuous careers, or not graduate in engineering?<\/b> The point is that men and women do not make choices in a vacuum but are influenced by the cultural, social, and political environment they operate in, and by expectations about their roles and characteristics long before entering the labor market. Ignoring this does not advance our understanding or reduce inequalities.<\/span><\/p>\n

Hours worked and income distribution<\/b><\/h3>\n

To grasp the economic well-being of male and female workers, it is important to consider the number of hours worked, because what we can purchase depends on how much we earn overall, not just on our hourly rate. As of November 2023, according to INPS (Italian Social Security Institute) data, <\/span>the average gross annual salary for non-agricultural private sector employees was EUR 22,600 for men and EUR 18,300 for women<\/b>, a 30% difference, greater than the hourly wage disparity, because women, on average, spend fewer hours on paid work, although they work more hours per day overall than men when including hours devoted to unpaid care. Recent data from the Bank of Italy show that among full-time workers, the gender gap in gross weekly wages exceeded 20% in 1990 and dropped to 11% in 2021. This significant change is primarily driven by reductions in differentials at the upper end of the income distribution (see Figure 1), among the wealthier workers. However, even though the decline was faster, the gender gap in earnings among the wealthiest 1% is well above the average. This is because <\/span>women face more career advancement barriers<\/b>, for instance. A similar narrative emerges when considering overall incomes \u2013 not just wages from employment but also from self-employment, business, or savings and investments. The higher up the income distribution ladder, towards higher incomes, the fewer women there are. A study conducted in 2018 with Anthony Atkinson and Sarah Voitchovsky demonstrated that this phenomenon is not unique to Italy but also occurs in countries with varying overall inequality levels, like the Scandinavian and Anglo-Saxon nations. It is evidence of a <\/span>glass ceiling<\/b> in incomes, difficult for women to break through.<\/span><\/p>\n

Income and motherhood<\/b><\/h3>\n

If women\u2019s incomes are struggling to grow, motherhood plays a significant role. The birth of a child marks a turning point \u2013 read, slowdown \u2013 in women\u2019s careers and remains one of the main factors contributing to gender occupational and wage gaps. The term \u201cchild penalty\u201d is used to indicate the cost on the labor market of having a child. It measures the <\/span>income loss mothers experience following the birth of a child<\/b>, compared to fathers or women without children. Even in Scandinavian countries, which usually lead in international gender equality rankings, mothers\u2019 incomes grew 20% less than fathers\u2019 incomes 15 years after the birth of their first child. Thanks to the work of a team of economists from the London School of Economics and Princeton, we now have a Child Penalty Atlas mapping the effects of the birth of a child on mothers\u2019 employment worldwide. And the child penalty is almost universal. Salvatore Lattanzio of the Bank of Italy estimated that in our country, <\/span>15 years after the birth of the first child, mothers\u2019 annual salary growth is 52% lower than that of women without children<\/b>. The decline is particularly steep immediately after birth (Figure 2), and the gap created does not close over the course of their careers.<\/span><\/p>\n

What we know about gender inequality<\/b><\/h3>\n

The gender gap in the data, as stigmatized by Caroline Criado Perez in her book <\/span>Invisible women<\/span><\/i>, has narrowed over time. The availability of gender-disaggregated data has increased: on the one hand, survey data have become more comprehensive; on the other hand, data from administrative sources have become more accessible. The effort of economists and social scientists to collect new data, conduct experiments, or use unstructured data (such as texts or information exchanged on social media) to study the different opportunities of men and women has made it possible not only to characterize phenomena, but also to investigate their causes. This work is far from complete; in fact, research on these issues is richer and more active than ever. Also because it is one thing how much data are known, another how useful their knowledge is in triggering real processes of change.<\/span><\/p>\n

Stefanie Stantcheva, a Harvard economist, has launched a research lab, the Social Economics Lab, which focuses on developing surveys that aim to capture the perceptions, attitudes and views that individuals have of certain phenomena such as immigration, taxation, international trade. In order to study how they react when provided with new information or narratives. Regarding gender differences, a study conducted by Sonja Settele, an economist at the University of Cologne, shows that respondents – a representative sample of the US population – underestimate the wage gap and, when informed of the correct value, are more supportive of the introduction of corrective policies, such as gender quotas. Similarly, a study by the University of Jena reveals that German citizens greatly underestimate the gender gap in labor and pension income. However, greater knowledge of the real differential increases awareness of the issue, motivating the surveyed sample to express support for the adoption of corrective policies. Unfortunately, these effects do not last.<\/span><\/p>\n

However, knowledge of data on gender inequality is a necessary condition to trigger processes of change<\/b>. And research is a vital element to that end.<\/span><\/p>\n

Figure 1 – How gender gaps in average and high wages have changed over the last 30 years<\/b><\/p>\n

\"How<\/p>\n

Notes: evolution of gender gaps in gross weekly wages for full-time workers. In red: on average; in yellow: among the top 1% of workers with higher wages. Source: graph based on Figure 6 in Francesca Carta, Marta De Philippis, Lucia Rizzica and Eliana Viviano, \u201cWomen, labour markets and economic growth’\u201d<\/em><\/p>\n

Figure 2 – The costs of motherhood<\/b><\/p>\n

\"Figure<\/p>\n

Note: percentage difference between the annual salaries of working mothers and those of women without children (black line). The colored areas show the breakdown of the pay gap attributable to differences in full-time equivalent weekly earnings (grey area), weeks paid (orange area) and transition to part-time contracts (blue area). The dashed vertical line indicates the year before birth, against which the effects are estimated.<\/em>
\nSource: Alessandra Casarico and Salvatore Lattanzio, \u201cBehind the child penalty: understanding what contributes to the labour market costs of motherhood\u201d.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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