Gender and Income

Abstract

The purpose of this study is to investigate whether income difference between male and female graduates still exist after controlling variables that contributing to income difference. Those variables are types of work, working hours and field of study. The European graduates’ data from CHEERS project is utilized in this study. From 2000 respondents in CHEERS dataset, 50.1% are female and 49.8% are male. After controlling the hypothesized influences, the result of t-test analysis showed that there is still income difference between female and male graduates. Female graduate annually earn 17% - 20% less income than their male colleagues.

Introduction

It was obvious that despite the increase of women’s participation in higher education and the labour force, they still work in a strongly sex-segregated market and under job condition which men would have rejected (Barbezat, 1987; Currie, 1991). The most apparent gap between female and male in the labour force is the remuneration difference. However, since 1980’s, it is reported that the gender pay gap has narrowed dramatically and women have increasingly entered traditionally male occupation (Blau and Kahn, 2000).

Those studies conducted to analyse the income difference between female and male have always shown a difference in remuneration. Female graduates earned less than their male counterparts (Mora, Garcia-Aracil, and Vila, 2007; Glinskaya & Mroz, 2000; Hinze, 2000). Recent studies by Vermeulen-Kerstens (2006) concluded that gender is the best predictor of career earnings. Furthermore Vermeulen-Kerstens noted that in the scope of Netherlands, where the study took place, this finding indicates that attempts by governments and other agencies aimed at decreasing the income gap between males and females are still unsuccessful. Vermeulen-Kerstens also raising a question about what is needed to be done to help female graduates become as successful in their career as their male colleagues.

Most gender studies explain the difference in income between women and men by two themes. The theory of equalizing differences proposes that women might select themselves into less stressful occupation or pick different career paths than men. They also might invest less in acquiring human capital because they experience more interruptions in their career (i.e., pregnant, raising children). The second explanation is that women are discriminated against, i.e. they are paid less than their male colleagues even if they have the same characteristics and perform the same tasks (Glinskaya & Mroz, 2000).

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