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In honor of International Women’s Day, the Taub Center is publishing a study with updated data on gender wage gaps in the Israeli labor market. The study shows that in 2018 there was a 35% gap in monthly gross wages and a 28% gap in net wages to the advantage of men. The majority of this gap resulted from differences in factors such as work hours, but these differences may stem, among other things, from gender-based norms. The unexplained portion of the gender wage gap was about 5%. Either way, wage differences between men and women remain among the highest of the OECD countries.
The study by Michael Debowy, Prof. Gil Epstein, and Prof. Avi Weiss presents wage differences — monthly and hourly, gross and net — between men and women in different sectors of Israel. The researchers examined the influence of different variables, such as work hours, parenting, occupation, and industry branch, on these differences.
Gender wage differences have remained stable over the past few years
In 2018, the gender wage gap in gross monthly income was about 35% and 28% in net monthly income to the advantage of men. The largest gaps were observed among non-Haredi Jews and others, while the smallest gaps were among Haredi Jews. Interestingly, in the past few years there have been opposing trends in the Arab and Haredi sectors. Among Arabs, wage gaps have been growing while among Haredim, they have been narrowing. Among Haredim, the gender wage gap narrowed from 31% in 2014 to 24% in 2018. Apparently, this change is due to the increasing participation of unskilled Haredi men in the labor market, who tend to work a limited number of hours and for lower wages than Haredi women.
With regards to hourly wages, the Taub Center researchers found that in 2018 the average wage gap was 21% for gross wages and 11% for net wages. As with monthly wages, here, too, the greatest disparities were among non-Haredi Jews and others. Women in this group earned, on average, about 25% less than men per work hour. In contrast, among Haredim, the gap in hourly wage reversed to the benefit of Haredi women since 2014, and in 2018, the hourly wage of Haredi women was higher than that of Haredi men; their gross hourly wage was 6% higher than that of men and their net hourly wage was about 13% higher. Among Arabs, the gross hourly wage disparity, which was almost non-existent in 2014 (and perhaps actually favored women), grew to about 15% by 2018. It is possible that this growth was the result of more Arab women entering the labor force in low paying jobs.
A comparison of monthly and hourly wage disparities shows that, in the Haredi sector, gender wage gaps are almost totally the result of differences in work hours, while in the rest of the population, the number of work hours explains only a portion of the gaps.
Disparities between women and men exist even when there are no children in the household
Due to gendered norms of parenting, it is likely that a portion of the wage disparity can be explained by pregnancy, childbirth, and child rearing. This research presents hourly and monthly wage gaps between men and women on the basis of the number of children under age 10 in the household. These findings show three things. First, even among people who are not parents, gender wage gaps exist — 39% in monthly wages and 18% in hourly wages — such that gendered parenting norms explain just a portion of wage gaps. Second, among parents with one to three children, wage gaps are similar to those with no children. Third, among parents of four children or more, the lion’s share of the wage gap is explained by differences in work hours between men and women. This means that the relation between raising children and gendered wage gaps is relatively loose, and is primarily seen for parents with four or more children.
The Education and the choice of occupation give women an advantage
The study also presents a multivariate analysis that examines the relationship between each variable and the monthly wage gap. It was found that the number of work hours explains a sizable portion of the gap, and among non-Haredi Jews and Arabs, the effect of the choice of economic industry branch also is quite substantial. After controlling for these explanatory variables, there is still an unexplained gap of about 5%.
It is interesting to note that there are also variables that work to narrow the gap — occupation and education. The study predicts that if it were not for the advantage that women have in levels of education and their choice of occupation, the gender wage gap would be greater by about 13 percentage points in the overall population, about 7 percentage points among non-Haredi Jews and others, about 4 percentage points among Arabs, and about 19 percentage points among Haredim.
Michael Debowy, one of the authors of the study, says: “The vast majority of the gender wage gap is the result of differences in the number of work hours and the employment branch. It is possible that these differences are the result of differences in preferences, but one cannot rule out that their source may be the result of gender norms and culture in the work place and beyond, or even discrimination.”
Prof. Avi Weiss, President of the Taub Center and also an author of the paper, says: “Gender wage gaps have been at the top of the research agenda for quite some time now. While historical disparities between men and women in wages and participation in the labor market have been narrowing since the turn of the century, they still exist. Do these differences result from different choices of women and men due to their different desires, or is there discrimination that then results in different choices? This is a critical issue that was not investigated in this paper, but should certainly be of great concern to decision makers working towards decreasing these gender wage gaps.”
The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.
For details, or to arrange an interview, please contact Chen Mashiach, Spokesperson: 054-7602151 or Anat Sella-Koren, Director of Marketing, Communications and Government Relations at the Taub Center for Social Policy Studies in Israel: 050-690-9749.