Economic Research Methodologies

Did you know Australian women just set a record?🏅 Women's labour force participation rate reached a new high of 63.5% in January 2025. That's a half-percentage-point jump from the previous month. Which is big in labour statistics land. It's this rise in women's labour force participation that drove the overall increase in the national rate (as men's participation rate fell slightly). Proof why it's important to always add a gender lens. January is the month where many new jobseekers and new hires are joining the labour market. As well as mothers who have been juggling summer holiday demands, and whose children will now be starting childcare or school, changing their working availability and preferences. Some will still be in the process of looking for opportunities and yet to be matched to a suitable job. This start-of-year job searching can help explain why the unemployment rate ticked up very slightly to 4.1% (again it was women's unemployment rate that drove the overall change, as men's rate was unchanged). Also today we found out Australia's latest gender pay gap, reported for November 2024. Men are earning on average $2073 in full-time weekly wages, compared to $1826 for women. That's a gap of $247 a week, tallying to around $12,800 a year. It equates to women earning 11.9% less than men on average, a gap which has widened since the last calculation (11.5% in May 2024). Men's earnings surged more rapidly than women's during this six-month period, particularly in sectors such as the Real Estate where jobs growth is strong. And partly the gender earnings gap reflects compositional changes. For example, between May and Nov 2024, we saw a notable expansion in women's employment in the Preschool and School Education sector. But because that's not a high-paying sector, it can dampen the calculation of women's overall average earnings. The Australian Government's legislated pay rise for Early Childhood Education and Care Workers came into effect in Dec 2024, so will be reflected in the next gender pay gap calculation. These numbers come fresh from the Australian Bureau of Statistics' Labour Force and Average Weekly Earnings datasets released yesterday. The takeaway from these numbers is that women's opportunities to join and stay in the paid workforce – and gain economic independence – continue to grow. Government policies, company initiatives, working-from-home and hybrid work, as well as the financial necessity of cost of living pressures, are all likely factors contributing to this record-breaking rise in women's workforce participation. But, we still need sustained and strengthened efforts to undo patterns of gender concentration, rectify the undervaluation of female-concentrated sectors, and unravel the biases and barriers that still underpin the gender pay gap. There are still more records to be broken. #genderpaygap #gendergap #genderlens #womenintheworkforce #genderequality #economics #labourmarket #ausecon

Does greater transparency in salaries between coworkers within a firm reduce the gender wage gap? Yes. Is this achieved through higher salaries of women or lower salaries of men? Research suggests mainly the latter. In a review of empirical evidence from five different countries (US, Canada, UK, Austria, and Denmark), Zoë Cullen concludes that: "In the cases where transparency achieved greater pay equalization between men and women—those in the lower left quadrant of the graph—the reduction in pay gap was accompanied by an overall reduction in wages. Economic theory offers an explanation. Horizontal pay transparency between coworkers within a firm created spillovers between negotiations; specifically, a $1 raise for one worker became more costly due to renegotiations with other workers who have the expectation of equal pay, causing employers to bargain more aggressively with each worker." Read the full article here: Zoë Cullen (2024), "Is Pay Transparency Good?" Journal of Economic Perspectives, 38 (1): 153-80. https://lnkd.in/e9pH8T-t (open access) In addition to horizontal pay transparency policies, the article discusses the effects of two other pay transparency policies: "Vertical pay transparency policies reveal to workers pay differences across different levels of seniority. Empirical evidence suggests these policies can lead to more accurate and more optimistic beliefs about earnings potential, increasing employee motivation and productivity. Cross-firm pay transparency policies reveal wage differences across employers. These policies have encouraged workers to seek jobs at higher paying firms, negotiate higher pay, and sharpened wage competition between employers."

A new analysis of millions of salary data points shows a troubling pattern, the gender pay gap doesn’t arrive fully formed. It compounds quietly over the course of a career: ∙ Entry level (0 years): 12% gap ∙ 10 years in: 19% gap ∙ 30 years in: 25% gap In the early stages, the disparity has little to do with unequal pay for the same work. But by the 10-year mark, a within-role gap begins to emerge. Women earn roughly 4% less than male peers in comparable roles with comparable experience. Beyond that point, something more structural takes hold. The within-role gap levels off at around 4–5%, yet the overall gap continues to widen because men are significantly more likely to move into higher-paying roles as their careers progress. The study also found that women’s earnings tend to plateau in their mid-30s, while men’s continue climbing into their 40s, a pattern that holds whether women re-enter the workforce after a break or remain continuously employed. The disparity extends beyond paychecks. Women report measurably lower workplace satisfaction (3.49 vs. 3.60 overall), with the largest gap in compensation and benefits. This holds true across industries, across companies, and even within the same organizations. The gender pay gap is no longer just a matter of equal pay for equal work. It is, at its core, a story of unequal access to career advancement too, and until that structural barrier is addressed, the possibilities are that the gap will continue to compound.

Q. Is there still a pay gap in the US? A. Yes, a significant pay gap still exists in the U.S., with women earning considerably less than men, especially women of color, though the gap varies by age and occupation; however, recent data suggests the gap actually widened in 2024 after years of slow narrowing, driven by stagnant wages for women while men's increased, showing pay inequality remains a persistent challenge. Key Figures & Trends: Overall Gap: In 2024, women earned about 81-85 cents for every dollar men earned, a slight decline from prior years, with some sources citing figures as low as 75 cents on the dollar when looking at all earners. Widening Gap: The gap grew in 2024, the first increase in over two decades, as men's salaries rose while women's remained flat, worsening lifetime earnings. Younger Workers: The gap is smaller for younger women (ages 25-34) who earn closer to men (around 95 cents), but it expands significantly as they age. Women of Color: The disparity is starkest for Black and Hispanic women, who earn significantly less than white men and women. Why the Gap Persists: Discrimination: Gender and racial bias in hiring and promotion. Job Segregation: Women concentrated in lower-paying fields, and undervalued roles. Caregiving Burden: Women still bear more unpaid caregiving, impacting their career progression. Lack of Policy: Insufficient workplace policies supporting family care. Impact: Lower lifetime earnings, leading to less Social Security and retirement savings for women. A projection that pay equality won't be achieved until 2088 at the current rate of change. In essence, while some areas show progress, the U.S. still struggles with substantial pay inequality, with recent data indicating a concerning reversal in closing the gap.

$1.2 million. That's what the system quietly takes from a Hispanic woman over a 40-year career. For Black women, it's $884,800. And the gap widened two consecutive years, for the first time in decades. I think about these numbers a lot. Not abstractly. In the way you think about something when you've sat across from hundreds of women who are brilliant, strategic, and exhausted. Getting passed over anyway. 96% of women of color say their career matters to them. 88% want to be promoted. And still, representation more than halves by VP level. The problem has never been ambition. $2.5 million in economic impact. 14,000+ careers. That's what a decade of this work adds up to at Embrace Change. I'm not sharing that to take a bow. I'm sharing it because it's an argument. When women of color get real investment in their trajectory. Not a lunch and learn, not a panel. Things move. The wage and pipeline data show what happens without that support. The $2.5M is what happens with it. We built this to close the gap. The data says it's working. The gap is still there. That's why we keep going.

Most workplaces think of dual-earner households as broadly equitable in unpaid domestic labour. Time-use data has been unambiguous for decades that they are not. UK Office for National Statistics data (2016, 2023) and US Bureau of Labor Statistics data (2019, 2022) consistently show women in dual-earner households performing approximately 2 additional hours of unpaid labour per day. Across a year, this equates to roughly 30 additional 24-hour days, or 90 additional 8-hour working days of unpaid work. A counterintuitive supplementary finding: cohabitation with a male partner increases women’s housework hours by 4-5 hours per week and decreases men’s by 1-2 hours (Gupta 1999; Baxter, Hewitt & Haynes 2008). The presence of a male partner increases female labour rather than decreasing it. The economic sequelae are substantial. Killewald (2013) documented a fatherhood earnings premium of approximately 6% for men. Motherhood is associated with a permanent earnings penalty of approximately 4-7% per child for women (Correll, Benard & Paik 2007). The same life event produces opposite economic outcomes. The retirement consequence: women in most OECD economies retire with roughly half the pension savings of men, driven substantially by the compounding effect of the motherhood penalty and unpaid caregiving labour. The workplace implication is not to feel guilty. It is to build systems that count the labour that has always been done but never counted. The strongest lever available to individual men is simple: take permanent ownership of one previously-shared domain, and stop asking her about it. Sources in comments. 🧬

Excited to share that our new NBER working paper — co-authored with Ann Harrison and Noor Sethi — is getting some attention! Axios covered our research on how the gender wage gap among MBA graduates has evolved over the past three decades. The good news: the raw gap has shrunk by 33–50% for recent graduates, driven largely by women staying in the workforce and working more hours than prior generations. The harder question our paper raises: why does a significant wage gap now appear immediately at the start of women's careers — a pattern that didn't exist before 2006? In earlier decades, the gap only emerged over time as career and family demands diverged. Today, something different is happening from day one, and we can't fully explain it with observable factors like industry, hours, or credentials. We also examine the roles of "greedy work," background sexism, and childcare availability — and find that while these factors shape labor supply decisions, the early-career gap in recent cohorts remains stubbornly unexplained. Progress, yes. But also new questions worth taking seriously.

₹5,00,00,000, that’s how much an average Indian woman loses in her lifetime, to feel safe. Not one person talks about this “gender tax”, but it bleeds Indian women from the moment they start earning. 1. Pay gap = ₹2 crore lost: For every ₹100 a man earns, a woman earns ₹70–₹80. That’s a 19–30% pay gap across India’s urban workforce. Across a 35-year career, that’s ₹2 crore gone. 2. Safety tax = ₹50 lakh lost: A Delhi-based World Bank study found women spend 35% more on daily commutes, cabs over buses, detours for safety, and no night shifts. In cities, single women pay a 7–10% higher rent for “safer” apartments. And half of working women drop out or avoid late-hour jobs because of unsafe commutes. That’s not “choice”, but fear economics. 3. Pink tax = ₹20–30 lakh lost: Women’s razors, deodorants, shampoos, dry cleaning, all cost 10–30% more for identical products. Even haircuts: ₹200 for men, ₹400 for women. The only pink tax ever removed? GST on sanitary pads in 2018. Everything else still bleeds money. 4. Career-break penalty = ₹2 crore lost: A 2-year maternity or caregiving break can reduce lifetime earnings by 30–40%. Women are 1.6x more likely to take a break, and face 49% lower callbacks when they return. Compounding and promotions vanish. Retirement corpus shrinks. You don’t just pause your career, but reset it to 0. Add it all up. They’re overcharged, undersafe, and undervalued. Every single “tax” she pays is invisible, unacknowledged, and perfectly legal. That’s not inequality, but systemic robbery disguised as normal life.

The earnings gap does not remain the same after motherhood. It widens. The moment a woman has a child under six, her earnings trajectory shifts. Not temporarily but Structurally. This is often discussed as a social issue. But it is, first, a labour market outcome. Time is reallocated. Hours become fragmented. Flexibility becomes a constraint rather than an advantage. The types of jobs a woman can take and sustain begin to narrow. Income does not just reduce. Earning potential changes. And yet, most programs designed to support women’s economic participation do not account for this shift. They train. They finance. They measure participation. But they rarely account for the care burden that reshapes how income is generated in the first place. So the expectation remains the same. That a woman with a child will convert skills into income at the same rate as one without. When that does not happen, it is interpreted as underperformance. But the issue is not effort. It is that the structure around her has changed and the program design has not. If childcare, time constraints, and care infrastructure were treated as core economic variables rather than social considerations, program outcomes would look very different. What would change if we designed women’s economic programs around how time is actually spent not how we assume it is?

Menopause is an earnings shock. And it arrives exactly when women's earning power should be accelerating. By our 40s and 50s, our careers are “supposed to” compound. High fees, senior roles, equity, exits, board seats. Particularly after our 20s and 30s, when many women were raising children and carrying households, midlife is meant to be the STEEP part of the earning trajectory. Instead, it is also the decade many women enter menopause. Bodies shift, sleep changes and the margin for error narrows. At the same time, responsibilities peak: Teenage children, aging parents and ageism in the very rooms women earned their way into. Population-level research using Scandinavian registry data finds lasting earnings declines associated with menopause diagnoses, in some cases as much as 10%.* This is the second earnings cliff. Women's earning power drops after childbirth. Emerging evidence suggests it drops again at menopause. The modern labour market still overpays uninterrupted availability. Care interrupts that, as does biology. But the way we price impact, contribution, and performance still assumes a leader who is completely uninterruptible. So when women in midlife feel "behind", they are often measuring themselves against a standard built on a timeline they never had. Women's earning power does not peak on a linear timeline. Our expectations still assume it does. When we remove women from the context of women's labour economics, we get self-doubt. When we put them back inside it, we get clarity. We will keep mistaking timing for talent until we stop. *Source: Conti et al., 2025