What is the gender gap in labor economics?

The wage gap refers to the difference in earnings between men and women in the labor market. Women earn less than men on average, even within the same occupation.²,⁴ As Claudia Goldin notes in her broader review of the field, the difference shrinks when factors like experience and education are accounted for, but it rarely disappears entirely.²

The participation gap measures the difference in the proportions of men and women in the labor force. Globally, women are less likely to hold paid work in nearly every country,⁵ and more likely to step away from the workforce at certain life stages, particularly around parenthood.¹ Goldin's research highlights how these patterns have been shaped by laws, social norms, and institutional barriers that vary across regions.¹

Women tend to work fewer hours in paid employment than men. They disproportionately occupy part-time roles, often not by preference but because caregiving responsibilities leave less room for full-time schedules.⁶ Part-time work also tends to pay less per hour, compounding the effect on women's overall earnings.

Women remain underrepresented in senior and executive roles, despite now outperforming men in many educational benchmarks.¹ Their representation becomes noticeably smaller at the mid-management level. McKinsey's Women in the Workplace 2025 study finds that only 93 women are promoted to manager for every 100 men, creating an early gap that widens through the senior ranks.⁷ This suggests that the barriers to advancement are driven not by a lack of qualification, but by factors like unequal sponsorship and fewer opportunities to rise.⁷

Women and men tend to work in different occupations and industries, and those differences do carry wage consequences. But Goldin's research shows that occupational sorting explains a surprisingly small share of the remaining gender pay gap, accounting for only 10 to 33 percent of the earnings difference. The bulk of wage differences, the Nobel laureate notes, increasingly arise within the same occupation, among workers with similar education and job experience.⁸,¹

Many high-paying roles reward not just productivity but availability: long hours, particular hours, and uninterrupted career continuity. Workers who can meet these conditions are more likely to access the highest compensation and advancement opportunities.⁸

Goldin argues that as long as employers disproportionately reward those who work long hours and particular hours, the gender pay gap will persist even among workers with identical qualifications. Her research shows that in occupations where workers are more easily substitutable and schedules are more flexible, such as pharmacy, the pay gap between men and women has largely disappeared.⁸

Goldin's research frames parenthood as one of the most significant explanations for the gender pay gap in high-income countries today. A study co-authored by the Nobel laureate found that male and female MBAs from the same program started with nearly identical earnings, but that the gap reached almost 60 log points within a decade, driven largely by career interruptions and reduced hours following childbirth.⁹

Cross-country research has confirmed this pattern. An earlier study of six countries found that women's earnings drop sharply after the birth of a first child and do not recover, with long-run penalties ranging from 21% in Denmark to 51% in Austria.¹⁰ Building on this work, a 2024 study expanded the analysis to 134 countries and found that child penalties are a near-universal phenomenon, and that in advanced economies, eliminating gender inequality has become almost synonymous with eliminating child penalties.¹¹

Goldin's research shows that the gender pay gap is closely tied to how caregiving responsibilities are distributed after childbirth.⁸ When paid parental leave is available to both parents but structured as a shareable entitlement, it is typically the mother who takes the leave, reinforcing rather than shifting the unequal division of caregiving.

Countries where fathers account for a higher share of parental leave recipients, such as the Nordic countries, tend to have leave periods specifically earmarked for fathers. That said, uptake is also shaped by gender norms, workplace cultures, and financial considerations.¹²

Across 22 OECD countries with available data, the share of men among parental leave recipients rose from 19.1% in 2013 to 26.1% in 2023, though leave is still far from equally shared.¹²

Affordable childcare works alongside leave policy by enabling women to remain in the workforce without prolonged interruption, reducing the career breaks that accumulate into significant lifetime earnings losses. The OECD notes that when affordable, good-quality childcare is unavailable, one parent is often forced to stay home, and it is most commonly the mother.⁶

Policy alone, however, is not enough. Goldin argues that the gender pay gap would shrink considerably if firms reduced the premium placed on working long hours and particular hours. The deeper challenge lies in how jobs are structured and whether flexibility comes at a cost to earnings and advancement.⁸

Where this has happened, the results are clear. Beyond the pharmacy example discussed earlier, Goldin notes similar shifts underway in veterinary medicine and parts of healthcare, where larger-scale practices and team-based coverage have reduced the premium on long and unpredictable hours. As more sectors adopt these models, the conditions that sustain the gender pay gap can be reduced.⁸