Cassie Werber* asks to what extent the wage gap is a result of the choices that women make, and how much of it is in their control.
We’re used to the idea of a “systemic” gender pay gap where women’s work, historically undervalued, continues to be less well remunerated and respected than men’s.
But to what extent is the wage gap a result of the choices that women themselves make, and how much of it is in their control?
In 2017, UBS, a wealth management firm and investment bank, wrote a report that tracked two hypothetical people, Jane and Joe, to see how their choices and other factors impacted their long-term financial health.
UBS identified five factors that go into creating a situation in which women and men can end up with hugely different amounts of wealth in the latter part of life.
The factors are: the existing pay gap, taking a short career break, flexible or part-time working, risk aversion, and life expectancy.
“Jane,” in the UBS model, ends up with less money than she started out.
“Joe” ends up with millions of dollars more.
Facebook COO, Sheryl Sandberg ignited an ongoing debate about whether women “leaning in” more could mitigate the impact of some choices, or even sidestep them altogether.
She has advocated for women demanding a seat at the table, outsourcing tasks, expecting their partners to take on equal domestic duties, and making greater ongoing commitments to their work.
But this approach presupposes that it’s women’s actions that make the difference, rather than the structures within which they work.
The fact is, no choice is made in a vacuum.
The gap’s frustratingly slow narrowing is pushing institutions and individuals to examine the extent to which the “choices” open to women are really choices at all.
Flexibility: Perk or trap?
Globally, women were paid 22 per cent less than men in 2017, according to the Economic Policy Institute.
One of the biggest reasons the pay gap is so hard to close, particularly in industrialised countries — many of which have “equal pay for equal work” laws — is that women tend to choose to work part-time for stints during their careers, particularly after having children.
Many suffer a penalty as a result that often effects their long-term ability to earn.
By the time her child is 20, the UK’s Institute for Fiscal Studies found, a woman will be earning 30 per cent less than a similarly educated man, with the biggest reason being the likelihood that she will have spent time working part-time.
Taking career breaks or working part-time to care for children or family members isn’t a choice for many women.
Because men already tend to earn more than their female partners, the decision about whose salary to sacrifice by a cut in hours is often made by economic default.
Added to that, social norms and precedent can make it easier for women to reduce their hours than it would be — at least initially — for their male partner.
Across developed economies, younger generations of workers, both men and women, have begun asking for more flexible working arrangements.
There’s an opportunity in this for greater equality, as it becomes normal for either parent to flex their work around childcare.
But it’s also possible that the ability to take work home or to remote locations will feed into an “always-on” culture that can be disastrous for home life and stress levels.
Another interesting development is employers experimenting with shorter working weeks for all their staff.
If a four-day week is standard across a firm, presumably no one will suffer discrimination because they don’t work five.
Appetite for risk
UBS notes that a big factor in women missing out economically is through choosing less high-return strategies for the money they do have.
To what extent is risk aversion — when it comes to money or a career — a choice?
A number of studies have shown that women tend to be more risk-averse than men, and it can affect their earning potential.
A 2009 US study found that lower levels of testosterone were associated with higher risk aversion, and that this manifested in less risky career choices.
People with lower levels of testosterone (a cohort which included most of the women) were less likely to choose risky — and high-paying — finance careers.
But while the testosterone-study evidence suggests women may be biologically prone to choose safer, less highly rewarded careers and investments, more recent research published this year also found that risk aversion can be learnt, and suggested that growing up in a patriarchal culture teaches girls to be more risk averse than boys.
The implication of the study is that women are not necessarily biologically predisposed to lower risk (and lower returns), and nor are necessarily choosing it: They’re taught it by the way they’re raised and the cultures they live it.
And that suggests they can change.
What we don’t choose — and what we do
In a longer life, the results of lower wages can be magnified.
Women tend to live longer than men, meaning they have to sustain themselves financially for longer — a difference that, UBS notes, can wipe out more of what they’ve saved.
Life expectancies certainly aren’t a choice, but there is some evidence that the gender life expectancy gap is closing due to factors including lower alcohol and tobacco use and better treatment for heart disease.
This year, UBS surveyed married, high-net-worth women and discovered that the majority deferred long-term financial management decisions to their male partner.
The finding suggests that, while men might be guilty of insisting on taking the financial reins in some cases, women are also complicit in relinquishing them, and UBS is advising women to work towards equal administration of their assets.
When it comes to a whole career, the wealth manager says, women can counteract some of the disadvantages of being paid less by “disciplined” investments and better understanding the relationship between risk and return — actual choices over which they can exercise control.
Choices do indeed play into the gender pay gap.
But many of them are based on systemic biases from which it’s hard, for people of any gender, to break free.
* Cassie Werber is a reporter for Quartz based in London. She tweets at @cassiewerber.
This article first appeared at qz.com.
