The International Gender Pay Gap

The ITUC has released a report on the gender pay gap around the world. On average it\’s 16%. I\’ll go into it in more detail later, but this little bit jumped out at me:

Many believe education is the key to closing the gap, but on the contrary, one of the most sobering findings of this report is that more educated women often find themselves on the wrong side of an even bigger pay gap.

This is entirely consistent with my commonly made assertion that we\’re actually looking at a childcare pay gap, not a gender one.

Education is of course an investment in human capital. That\’s what the employers of the educated are paying for, the interest, the profit, to be made from said investment. Those who take one or more one or two year breaks from the labour market to have and care for children are going to have less of such human capital from which the employer can profit. Thus they are likely to be paid less. This also applies, in a smaller way, to those who are likely to do so in the future.

By extension, we can see this as a validation of my assertion. If the gender pay gap were a result of taste discrimination, then there\’s no particular reason why the educated or the un-educated should face a larger or a smaller one. But if it is about career breaks, or the possibility of them, then those hired for the human capital are indeed likely to face a larger one, as above.

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