Project leader

Anne Boring, Erasmus University Rotterdam, LIEPP (Sciences Po).

Research project proposed for the AXA Fund and Erasmus University Rotterdam

Project description

Over the past 20 years, initiatives taken by public authorities and companies in France and other European Union countries to promote gender equality in the workplace have largely focused on reducing pay gaps and increasing women's access to positions of responsibility. While wage inequalities between women and men in equivalent positions have decreased (albeit slowly) and more women are reaching positions of responsibility (although they remain in the minority), inequalities in income accumulated over the course of professional careers remain very large. Indeed, income inequality, when accumulated, translates into large disparities in wealth. These inequalities are largely caused by the high risks that women take or suffer throughout their professional lives. However, these risks and their consequences are often poorly assessed.

The research project aims, on the one hand, to contribute to our understanding of income inequality accumulated over the course of professional careers and, on the other hand, to better measure, in order to better prevent, the income risks incurred by women during their professional lives. In this context, income inequality is defined as the difference between the income earned by women and men throughout their careers, i.e., the difference in wealth obtained through work.

Existing measures of wage inequality provide a comparative picture of the remuneration of women and men in the labor market at a specific point in time (measuring a financial flow), but they do not provide a clear understanding of the differences in income accumulated through work over the course of a working life (the stock of wealth accumulated through earned income). However, women's careers often involve more risk, start at lower pay scales, are less upwardly mobile than men's, and are subject to more interruptions. At the end of their careers, the “small” inequalities accumulated in the labor market tend to generate very large wealth gaps, creating significant inequalities in terms of quality of life in retirement.

These accumulated differences remain poorly measured by economists. One approximation is the “overall pay gap” between women and men, created by Eurostat, which is a synthetic measure of gender differences in terms of income accumulated over a working life. According to Eurostat estimates, this gap was 36.2% at the European level in 2018 (29.6% in France). There are three reasons for these significant gaps (roughly double the usual wage gaps): on average, women participate less in the labor market than men, and when they do participate, they tend to work fewer hours than men and earn less per hour. However, this indicator is very approximate and does not take into account the many factors that contribute to significant gaps throughout working life.

Objective

The primary objective of this research project is to better understand and measure the income gaps that accumulate over the course of a working life. It takes into account the fact that women and men are more or less available at different times in their professional careers. In addition, this project aims to better document gender differences in the risks accumulated in terms of pay and labor market participation at different stages of working life. However, women seem to be more often exposed to these risks. The research project thus aims to quantify and break down the sources of risk that women face during their working lives.

Indeed, accumulated income inequalities are the result of numerous individual choices (more or less constrained) that involve risks of varying degrees. Factors that widen the gap in accumulated income include, for example, gender differences in educational choices, as the fields of study more often chosen by women are riskier from a professional career perspective and generate wage inequalities that appear as soon as they enter the labor market. Furthermore, wage discrimination varies in severity depending on the sector of activity and the companies for which individuals work. The choice of sector or employer is therefore another risk factor that can impact accumulated income. Differences in accumulated income are also due to decisions made within couples, for example through the differential impact of parenthood and care responsibilities on the career trajectories of women and men. Women are also more exposed to the risks of gender discrimination in the assessment of skills, as well as gender segregation in the labor market. Certain highly feminized occupations are particularly exposed to health risks, which reduces the ability to work and therefore to accumulate wealth. Women are also more exposed to the risks of physical and economic violence, which can negatively impact work performance and therefore long-term income. Other life events, such as accidents, illness, caring for dependents, divorce and separation, as well as returning to education and career changes, can also pose risks to accumulated income. These events can impact career involvement at different times and thus widen the gaps in wealth accumulated through earned income. This project aims to better understand these different risk factors.