Do Female Occupations Pay Less but Offer More Benefits?

Photo credit: Fibonacci Blue

We’ve recently marked the occasion we call Women’s Equal Pay Day (Tuesday, March 31). The national holiday marks how far into the year women must work to earn what men earned in the previous year. Equal Pay Day is a reminder that women earn far less than men ($0.22 less per $1, on average). This year the gender pay gap sparked conversations about the precarious circumstances of many female workers on the frontlines of the COVID-19 epidemic.  

A report by the National Women’s Law Center highlighted that women are over-represented in jobs considered essential services, such as health care and child care, and also in jobs with high rates of unemployment due to the epidemic, such as retail and hospitality jobs.

But not everyone agrees that women earning less is a problem. A high-profile Forbes article by Karlyn Borysenko took up the classic economic argument that that the gender wage gap is easily explained by women’s own choices. Women choose motherhood, women choose not to negotiate their salaries, women choose bachelor’s degrees that qualify them for lower paying jobs. She argued that if we account for these choices, there is no gender wage gap—though I would note that even after accounting for occupational choice and hours worked, women’s earnings are still lower than men’s, on average.

In a new article in Gender & Society, I go beyond thinking about gender inequality in the workplace as only about pay and explore the possibility that women do in fact choose to work in lower paying jobs, but they do so because these jobs offer more fringe benefits. Perhaps, I thought, women’s jobs don’t really compensate them less for their work, but rather their compensation comes in the form of benefits such as health insurance coverage, retirement plans, and paid leave. I was wrong.

The Findings

My study relied on three major datasets: the Medical Expenditures Panel Survey, the American Community Survey, and the Occupational Information Network.  My analysis was based on information for nearly 35,000 people who worked full time in year-round jobs.  I had information about major fringe benefits, including whether the person’s employer offered health insurance coverage and whether the person had paid leave and a retirement plan. I also had information about the person’s occupation, including percentage of workers in the occupation that were female and the amount of education and training that the occupation required.

I first looked at average differences in wages, without accounting for other worker and job characteristics. Like everyone else, I found that women’s jobs pay less than men’s jobs. I also found that women’s jobs offered more benefits. Compared to men’s jobs, women’s jobs (jobs with more than 80% female workers) were more likely to offer health insurance coverage, paid vacation, sick leave, and retirement plans. These results seemed to confirm the idea women’s jobs don’t really compensate them less, but rather that some of the compensation comes in the form of benefits

However, the women’s choices perspective tells us that we cannot compare pay differences between women’s and men’s jobs without considering factors that may reflect differences in men and women’s choices and their pay, such as a person’s level of education and an occupation’s education and training requirements. When I accounted for these factors, I found that women’s jobs still paid less than men’s jobs (about $2 less per hour on average), but women’s jobs provided fewer benefits, particularly health insurance coverage and retirement plans. These findings call into question the argument that women’s jobs pay less than men’s jobs because women choose jobs for benefits rather than wages.   

The Takeaway

This year, women’s equal pay day was observed in the shadow of COVID-19, adding a pressing urgency for essential women workers who continued to work in dangerous situations for less pay. My research shows that many women workers may be less protected from the economic fallout of COVID-19 simply because their job is associated with “women” or considered “women’s work.” Health care professionals, such as nurses and home health aids, are disproportionately female. While on the front lines of this public health crisis, these workers are making less, on average, than workers in male occupations that require similar levels of education and skills.

Women’s decisions may account for some part of the gender wage gap story. But it is unlikely that women choose jobs that have lower pay and fewer benefits.  Rather, it likely that the devaluation of women’s work, the belief that women’s work is worth less than men’s work, continues to lead to inequalities in wages and benefits. Such gender inequality directly affects women and their families. At a time when paid leave, health insurance coverage, and retirement savings are necessities, it is more pressing than ever that women workers in America secure equal pay and equal benefits for equal work.

Leslie Hodges is a Post-Doctoral Research Associate at the Institute for Research on Poverty at the University of Wisconsin – Madison who studies how families make ends meet. She specializes in the use of survey and administrative data to examine patterns in employment, health, and well being for different population groups and to inform evidence-based policy making on public programs including child support, unemployment insurance, and SNAP. You can find her on Twitter: @lb_hodges.

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