A potential explanation for the observation that women work fewer paid hours than men is the economic incentive created by the gender wage gap. Stemming from labor market discrimination, lower wages for women reduce the financial reward for working, potentially leading them to choose more free time over additional paid work.

Hypothesis: The Gender Wage Gap as an Explanation for Differences in Working Hours

As defined for specific OECD-based analysis, the gender wage gap is a metric calculated by taking the difference between the median earnings of full-time male and female employees, and expressing it as a percentage of the male earnings.

OECD's Gender Wage Gap Metric

Research reveals that a primary driver for the earnings disparity between men and women is the arrival of children. Following the birth of a first child, women's earnings tend to drop significantly and this reduction often becomes permanent. Conversely, men's earnings are typically unaffected by the birth of a child.

Divergent Impact of Childbirth on Men's and Women's Earnings

The gender wage gap is defined as the substantial and persistent difference in average earnings between men and women. This wage disparity continues to be a feature of labor markets even in countries with legislation that mandates equal pay.

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Many nations have established equal pay laws, which are legal mandates requiring that men and women receive the same wages for similar work. The existence of these laws makes the persistence of a gender wage gap a notable issue.

Equal Pay Laws

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

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