Chart of the Day: The Gender Pay Gap Due to Children is Growing (even before COVID-19)
My chart of the day comes from Patricia Cortés and Jessica Pan’s excellent new paper “Children and the Remaining Gender Gaps in the Labor Market”. I really liked this paper. It discusses the literature on Parenthood and Gender inequality in a deep and thoughtful way, introduces a relatively simple theoretical model that makes some predictions they can test with the data and finishes with a discussion of policies.
The chart is the result of a decomposition of gender inequalities in earnings, using a sample of heads and spouses from the PSID. Over time the background-related inequality in earnings has fallen as women’s educational achievement levels have equalized with men’s. Child-related gender inequalities are growing in both absolute terms and as a proportion of total gender wage inequality.
I recommend reading the paper. The empirical analysis was a nice support for the rest of the paper, but the real contribution is pulling together the various strands of literature to summarize the current state of knowledge on this topic. It’s a paper I will be going back to and citing regularly.