Practice question · Multiple choice
Two studies of the same country report gender pay gaps of 5 per cent and 20 per cent, and neither has made an arithmetical error. How is that possible?
Hints
- Ask what each figure holds constant.
- Controlling for occupation and hours removes some of the gap from the estimate by design.
Show the answer
B. They measure different quantities: adjusted hourly comparisons and annual earnings capture distinct mechanisms.
Why
An adjusted hourly gap holds occupation, sector and hours constant and answers whether women are paid less for the same work. An annual earnings gap holds nothing constant and answers whether women earn less over a year, which folds in part-time hours and interrupted participation. Both are correct answers to different questions.
Practise Work and the Gendered Labour Market
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