Question

We have seen in class that the labor force participation of women has increased considerably in the last 50 years in many countries of the world. Unfortunately, during the same time, in some countries, gender wage gap has increased. Newspapers in these countries have reported this increase in the gender wage gap as evidence that there have been an increase in the number of discriminating firms or in how discriminating they are. Using the model of discrimination learned in class, provide an alternative explanation of what could have increased the gender wage gap. Use a graph.

Answer 1

The labor force participation of women has increased considerably in the last 50 years in many countries of the world. However, during the same time, in some countries, gender wage gap has increased. Newspapers have reported that this increase in the gender wage gap as evidence that there has been an increase in the number of discriminating firms. Gender wage gap is worse in many countries as they pay very high wages to men as compared to the payments made to women. This wage gap could increase due to the reason that men are more flexible about working at odd hours because many women avoid working in night shifts. Also, many studies have shown that motherhood is a reason for increasing wage gap. This impacts job choosing pattern as well. The wage gap has started to decrease in recent years because the education level of women has increased.

The following graph shows that the earnings of females relative to males has increased of the years. Therefore, gender wage gap has been declining in many countries.