Should We Mind the Gap? Gender Pay Differentials and Public Policy

Abstract

Differences in the earnings of women and men are increasingly being used to justify regulation of the private affairs of employers and employees. Yet there is very little evidence that the 'gender pay gap' is the result of unfair discrimination. In fact in can be explained by variations in the kinds of job undertaken by men and women, as well as educational and lifestyle choices. Women may favour quality of life and job satisfaction over higher earnings. The authors argues that complete equality of pay is impossible to achieve in a free society of any complexity. Men and women would need to be identical in their qualifications, choice of occupations, career plans and lifestyle choices. Thus policies that try to impose equality through tighter employment regulation are unlikely to have much impact, and such measures may damage the economic position of both men and women.