We all know the drill—despite having equivalent education and experience, women continue to earn less in the workplace. In her new paper, “A Grand Gender Convergence: Its Last Chance,” Claudia Goldin identifies a major factor in pay differentials between: women that strive to “have it all” make less than men because they tend to demand more flexible schedules. The pay gap, she explains, “exists because of hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. A flexible schedule comes at a high price, particularly in the corporate, finance, and legal worlds.” These fields give premium pay to certain key players—mostly men who don’t take time off for children or aging relatives. Goldin found that occupations in which earnings have a nonlinear relationship to hours worked—because staff have “perfect substitutes”—tend to be more egalitarian in pay and in those that don’t, women may be penalized for working shorter hours or having to leave for a few hours during the work day. Though Obama is urging Congress to pass the Paycheck Fairness Act—which will revise provisions of the Equal Pay act that will require employers to prove that pay disparities are about skill and background, rather than gender—Goldin insists that Government intervention will not help, nor will the standard call for men to take more responsibility in the home. She states, “the gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours or worked particular hours.” The bottom line: The way work is structured and rewarded, especially in traditional organizations, must adapt to changes in society and technology.
New report finds women's demand for flexible schedules costs them.