In 2023, the gender pay gap still costs women about $90,000 in lifetime earnings. That’s because for every dollar that men earn, women make only $0.83, according to Payscale's latest 2023 Gender Pay Gap Report.
But what are the causes behind that pay gap? Researchers at the U.S. Census Bureau and the Department of Labor’s Women’s Bureau set out to determine what variables contribute most to the gender wage gap, but it turns out that about 70% of it is immeasurable—even in this day and age.
There’s a really big portion of the variation in wages that we can't attribute to measurable contributing factors. "It is kind of hard to say exactly what's happening in that 70%,” Sarah Jane Glynn, senior adviser at the Department of Labor's Women's Bureau, tells Fortune. “I think there is pretty broad consensus among researchers and economists that at least a portion of that is discrimination. But because we can't pinpoint it precisely in these kinds of statistical models, it's sort of an open question.”
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Many of the factors you would expect to contribute to the gender wage gap—such as the number of hours worked, education, type of job, and industry worked in—do have a measurable impact on wages. “Those are all controlled for and we have variables to measure the impact of those differences in the econometric model,” Glynn says, adding that there are data limitations. “That 70%, we can't say for sure, yes, 70% is discrimination. But we know that's a big piece of what's lurking underneath that.”
Yet even within the measurable impacts, there are surprising aspects. You would think education, for example, would be a huge leveler of pay for men and women. But Glynn points out that women have been out-educating men for quite a while now—women have been the majority of college graduates each year since the 1980s. And yet the U.S. has yet to close the gender wage gap.
Women basically need a higher degree to get paid the same as their less-educated male counterparts, research shows. It's almost exactly at parity—a woman with a high school diploma, for example, earns almost exactly as much as a man who never even graduated from high school. A woman with a Ph.D. earns pretty much exactly as much as a man with a master's. “It really is sort of that one-to-one step," Glynn says.
The difference in the types of jobs men and women work also plays a major role. “It's the fact that women are shut out of some of the highest-paying jobs,” Glynn says. “The highest-paying jobs tend to be strongly coded as jobs for men. And feminized labor, the care economy labor, is undervalued and underpaid,” Glynn says, adding that it has a significant impact on women’s ability to work and to advance in their career.
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Salary history, on the other hand, does measurably widen the pay disparity between men and women, as do industry and occupation, Women's Bureau director Wendy Chun-Hoon tells Fortune. “That reliance on past salary just locks in that inequity, locks in that former discrimination,” she says.
The research is clear on one thing: There will need to be changes on multiple fronts to diminish the gender wage gap—and that will likely take changes at the policy, employer, and worker levels.
