In honor of International Women’s Day the Taub Center has published recent data on gender disparities in the labor market

A new study, published in time for International Women’s Day, presents recent data on gender wage gaps in the labor market and shows that in 2018 there was a gap of 35% in the gross monthly wage between men and women and a 28% gap in net wages (with men earning more, of course). The majority of the gap is due to differences such as in the number of work hours, but it is possible that even these differences have their root in, among other things, gendered norms. The unexplained portion of the gap is about 5%.

The researchers, Michael Debowy, Prof. Gil Epstein, and Prof. Avi Weiss, examined the influence of various factors including work hours, parenthood, occupations, and industry sector on wage gaps and found that the wage gap between men and women in Israel is still among the highest in the OECD countries.

The study findings show that the largest wage gaps were observed among non-Haredi Jews and others while the smallest were among Haredi (ultra-Orthodox) Jews. In addition, in the past few years there has been a reversal of the trend in the Arab and Haredi sectors: among Arabs the wage gaps have grown and among Haredim they have narrowed. The gender wage gaps among Haredi narrowed from 31% in 2014 to 24% in 2018. This change is apparently due to the continued entrance of unskilled Haredi men into the labor market into positions with few work hours and lower pay than Haredi women.

With regard to hourly wages, the Taub Center researchers found that in 2018 the average hourly wage gap was 21% in gross wages and 11% in net wages. As with monthly wages, here, too, the greatest gap was among non-Haredi Jews and others. Women in this group earned, on average, about 25% less than men per work hour. Among Haredim, on the other hand, since 2014, the gap in hourly wage turned to the benefit of women, and in 2018, the average hourly wage of Haredi women was higher than that of men; their gross hourly wage was higher by about 6% and their net wage by about 13%. Among Arabs, the gross hourly wage gap, which was almost non-existent in 2014 (and was perhaps even slightly to the benefit of women) grew to about 15% in 2018. It is possible that this growth is due to the entrance of more Arab women into the labor market in low-paying jobs.

Wages, work hours, and parenthood

Due to gendered norms around parenting, it is likely that a portion of wage differences are due to pregnancy, childbirth, and child rearing. The study examines the gaps in hourly and monthly wages between men and women on the basis of the number of children under the age of 10 in the household. The findings show three things. First, even among those who are not parents, there are gender wage differences — 39% in monthly wages and 18% in hourly wages — such that gendered norms surrounding parenting explains at most a portion of the gap in wages. Second, among parents of one to three children, the wage gap is similar to the gap among those with no children. Third, among parents to four children or more, the lion’s share of the wage gap is explained by differences in work hours. All in all, this indicates that the relationship between child rearing and gender wage gaps is relatively weak, and is mostly reflected in the gaps between those with four children or more.

Women’s education level and occupation choice narrow the gap

In the framework of the study, it was found that there are factors that operate to narrow gaps – occupation and education. The analysis predicted that were it not for the advantage women have due to their education levels and occupational choice, the gender wage gap would have been higher by about 13 percentage points in the overall population, about 7 percentage points among non-Haredi Jews, about 4 percentage points among Arabs, and about 19 percentage points among Haredim.

Prof. Avi Weiss, Taub Center President and one of the researchers for this study, says: “Gender wage disparities have been at the heart of research agendas for quite some time. While historic gaps have narrowed since the beginning of the new millennium in terms of wages and labor force participation, they are still with us. Do these differences stem from the choices that women and men make due to their different desires, or is there discrimination that leads to different choice? This is an important issue that was not part of this study but should certainly interest policy makers who are interested in narrowing wage gaps.”