User:Ivneet Randhawa/Gender pay gap

Human Capital Endowment
The human capital endowment theory indicates that the gender wage gap is a result of gender difference in human capital accumulation and investment on human capital. Under this concept, it is believed that females are more likely to get lower wages compared to their counterparts, due to them being less educated, less experienced, and less productive. From an economic perspective, this theory considers education as a critical investment for attaining useful resources that in return provide positive benefits in the future. Benefits such as increasing academic confidence, thinking critically, and enhancing one’s skillset increases a person’s employability, productivity and wage. Although education is equally attained among genders in many parts of the world, there are some countries where females do not receive education which  creates a discrepancy in the gender wage gap. In terms of productivity, the theory suggests that since women are affected by household labor their productivity and investments into human capital through experience and training are negatively affected. Much of this is attributed to the burden of household work, which is higher when compared to men.

Compensating Wage Differential Theory
The compensating wage differential theory indicates that all jobs in the labor market are equally attractive to workers, however, women deliberately choose less paying jobs to balance the traditional division of labor within the family. In other words, it is women’s choice and priorities that make them less likely to earn as their male counterparts. To explain this, a recent study that looks at hours worked by employees from 2011 to 2017 and explanatory variables such as sex, age tenure, and marriage status found significant differences between hours worked by employees. More specifically, the study notes that “male train and bus operators worked about 83 percent more overtime hours than their female colleagues and were twice as likely to accept an overtime shift on short notice". In addition, “female employees were disproportionately willing to take less-preferable routes if it meant working fewer nights, weekends and holidays”. The study ascribes these differences to personal preferences and child caregiver responsibilities and states that “overall, women, especially single women with children, value both time and the ability to avoid unplanned work much more than men ''.

Heteronormativity in Contemporary Workplaces
The concept of heteronormativity is defined as “a body of lifestyle norms, in which people tend to reproduce distinct and complementary genders”. Within contemporary workplaces, the notion of heteronormativity indicates the men and women are to act in a certain way according to their sex. This, as a result, confines women and reinforce gender binaries and gender hierarchies. It also directly correlated to the gender pay gap, as heteronormativity dictates the field of work many women are in. This is shown in a study focused on discrimination and the gendered workplaces, which showcases  “women in feminised occupations are “twice disadvantaged- first by being in a “female” field, and second by being a woman in that field, since men make more than women, even in “female” fields””.

The Glass Ceiling Effect
The glass ceiling is a term used to showcase an invisible barrier that prevents women in attaining the top jobs in management. More recently, there have been studies that show the existence of glass ceilings that consequently prevents women from reaching higher wages. For example, a study analyzing the gender wage gap and glass ceiling effect has found that the wage  gap is linked to gender differences in hierarchical position within a firm. Another study looking at managers employed full time in  private sectors showcases only 7 percent of women working in top positions with extensive managerial duties compared to 15 percent of the men. The study also noted that women in managerial positions were less likely to be married than men and  had a lower mean number of children in the household. This, as a result, suggests that barriers such as general societal and cultural conditions and structures prevent women from breaking the glass ceiling and reaching higher wages.

Estonia
According to Eurostats (2014) Estonia is the country with the highest wage gap in the European Union. A  study examining the gender wage gap in different sectors of the labor market indicates the gap is lowest for jobs associated with professionals, transportation, construction and electricity supply and highest for manufacturing and craft workers. Studies have concluded that this can be attributed to the “concentration of Estonia female and male employees in different sectors (e.g. the proportion of men is greater in construction, of women in healthcare) and occupations (e.g. there are managers amongst the men and more clerks amongst the women)”. Vertical gender segregation known as the glass ceiling effect also contributes to the discrepancy of wages among gender in Estonia. Closer examination on this data showcases that the proportion of women that fall under managers and senior officials is “lower than the average top managers (directors and chief executives, managers in small enterprises), being only approximately one quarter”. In addition to this, education has also determined the difference between men’s  and women’s income. Studies have concluded that “the male wages exceed women’s wages partially because men tend to study fields which would later ensure a higher income (e.g. fields associated with information technology)”.

Netherlands
A recent study in 2019 has noted that the gender pay in the Netherlands was 14.6 percent. It was noted that in contrast to 20 years ago, more young women in the Netherlands are completing tertiary education than young women (44% vs. 38%). However, the gender wage gap still remains as “only 10% of tertiary qualifications in computer science went to young women while 75% of Dutch tertiary degrees in health and welfare studies went to females". Additionally, studies have noted that working part time has also influenced earning and career profiles for women. Having to work part time consequently limits the women in management functions: "only 28% of staff with a supervisory role is female, and less than 5% of board members of listed companies". This combined with fewer working hours, and low earnings had resulted in low pensions for women.