The Economic Rationales For Narrowing The Gender Pay Gap - Introduction
The extent to which the gender pay gap represents inequities, and the approach that governments should take to improve the relative pay of women, are much debated within economics and public policy.
Notwithstanding these debates, the gender differences that lie behind the pay gap may be compromising the government goals of family well-being and economic performance. These linkages have been brought into focus by contemporary issues, including:
- The important role of women's earnings in achieving family and child well-being, as well as women's future earnings and independence
- The recognition that low pay contributes to lower female labour force participation rates, and that, in turn, being out of the workforce for substantial periods leads to greater difficulties in accessing sustainable employment in the future
- The stress of "work-life collision" experienced by households with children, and the need for better arrangements for work and childcare to enable parents to balance paid work and family responsibilities
- The drop in New Zealand fertility rates to below replacement level (without migration)
- Skill shortages, which have been identified as more severe in gender-segregated occupations, and as a serious impediment to economic growth
- A recognition that occupational downgrading, that is when someone is in a job which is below their level of skill and experience, can result from difficulties reconciling caring responsibilities with job demands
- The importance of shoring up labour force participation rates as the New Zealand population ages.
Outline of the Paper
The first section discusses the factors that contribute to the gender pay gap.
The second section considers the aspirations of families and how these impact on labour force participation, work-life balance, and fertility, and summarises the rationale for family policies.
The third section considers gender equity issues that impact on business performance including skill shortages and occupational segregation, part-time work, low pay, pay equity, and human resource practices. It concludes with the rationale for a gender focus in economic transformation and productivity arenas.
