Is the Male-Female Earnings Gap Here to Stay?

It's no secret that men, as a group, earn more than women, with the pay gap currently standing at around 16 cents—that is, for every dollar earned by an average man, the average woman makes just 84 cents. While the reasons for that gap are varied, a recent report from the Pew Research Group highlights one of the major causes.

The past 30 years have seen significant improvements in closing the earnings gap between men and women. A major part of that improvement is due to the fact that the gap is considerably closer for men and women at the beginning of their careers today than it was in the past—something that is reflected in the following chart: 

Don't start celebrating just yet, however: the folks at Pew also have evidence that suggests that those same workers will watch their earnings diverge over the next decade or two. As the following chart shows, 25-34 year-old women in 2000 were earning around 87 cents for every dollar earned by 25-34 year-old male in the same period—an earnings gap of 13 cents. By 2012, however, the gap for the exact same cohort had widened to 21 cents: 

So what gives? In a word: parenthood. Note that the earnings gap widens as a cohort of workers hit their prime child-rearing years. And consider that a parent who decides to reduce hours or leave the workforce altogether to raise offspring is likely losing income to do thus—thereby reducing their contributions to the overall earnings data pool. 

With that set of parameters in mind, it's no surprise that women's average earnings fall further behind over the child-rearing years—men are simply much less likely to leave the workforce to become the primary caregiver than women are, so their collective income pool is less likely to lose momentum over the period. And it's equally clear that there's no quick way for returning parents to regain lost earnings ground on re-entering the workforce, meaning that the effects are likely to show up in the data right through to retirement.

While there are many more strands to the gender earnings gap—including education/qualifications, pay levels in typically male or female dominated professions and, yes, outright discrimination—it's clear that one of the major reasons for the gap is wrapped up in cultural norms around parenting. Without a substantial shift in that realm, it's difficult to imagine the kind of picture being painted in the data changing too much in the coming years. The earnings gap, then, may be here to stay for some time.