Tue Jul 22

New study finds the gender earnings gap could be halved if we reined in the long hours often worked by men

Written by: Lyndall Strazdins, Professor, Australian National University

There are lots of reasons why people work extra hours. In some jobs, it’s the only way to cover the workload. In others, the pay is poor, so people need to work extra time. And in others still, working back late or on weekends is encouraged and rewarded, explicitly and implicitly.

Those employees who do the extra hours, willingly and without complaint, are seen as hungry and ambitious. A view expressed in some workplaces ^[1] is simply “that’s what everyone does”.

But what if we discovered that people – at least in heterosexual couple households – can only work long hours at their partner’s expense? Would it still be OK for workplaces to expect people to work longer than our standard full time week, and incentivise them for doing so?

Our study ^[2], published this month in the journal Social Indicators Research, found in Australian couple households where both partners had jobs, men earned on average $536 more than women every week. In Germany, the weekly gender earnings gap was €400.

About half of that income gap in both Australia and Germany was due to men working long hours and women effectively subsidising them to do this by cutting back their own work hours.

It’s tough to combine a job with running a household, but one person working extra hours makes this almost impossible. In households, a job with long work hours means someone else must pick up the rest. This includes caring for kids, running the house, walking the dog, cooking dinner and more.

What happens when one partner has to pick up the rest

One in three Australian employees care for children, and 13% of part-time and 11% of all full-time employees give care to someone else ^[3], often an ageing parent. This has knock-on effects which are impacting many people in our workforce. The extra hours don’t come out of nowhere, but they have been invisible in what we think of as fair.

In our study, we costed this knock-on in terms of earnings and work hours gaps in households, and what this could mean for equality of income.

We studied between 3,000 and 6,000 heterosexual couples from 2002 to 2019 in Australia and in Germany, estimating their weekly earnings and work hour gaps.

To understand the dynamics in the household, we used a two-stage instrumental variable Oaxaca-Blinder decomposition ^[4] – a method that allowed us to model earnings gaps as a function of both partners’ paid and unpaid hours. This helped us estimate what the gender gap in hours and earnings would look like if time weren’t being “borrowed” or “subsidised” within the home.

Changing the hours men and women work

The results were striking. We showed how one partner’s paid work hours can increase when the other partner does more unpaid (household) work. This ability for partners to “trade” hours was one of the most important drivers of the work hour (and earning) gap.

So we re-ran models and recalculated what hours a woman and a man would work if one partner wasn’t “subsidising” the other’s work hours. The model showed women would work more hours and men would work fewer when there was a more even split of home duties. The weekly work hour gap shrank to 5.1 hours in Australia (a 58% reduction) and 6.9 hours in Germany (a 47% reduction).

The impact on earnings was just as significant. The gender earnings gap would shrink by 43% in Australia and 25% in Germany.

The gender earnings and work hours gaps are well known ^[5], and these are not the only countries facing this problem. What hasn’t been shown before is how it works in households to drive gender inequality across the nation.

The rest of the earnings gap is largely due to differences in pay across male and female industries and jobs, and the persistent gender pay gap in hourly pay.

According to the Australian Bureau of Statistics ^[6], the average gender gap in hourly pay is 11.1%. This gap reflects the fact, hour for hour, women are generally paid less. The average weekly earnings gap is much larger at 26.4%^[7].

As things currently stand in Australia, women earn only three-quarters of what men do, a shortfall similar to that in (Germany)^[8].

One part of the earnings gap is the gap in the hourly pay rate, but the other is the gap in how many hours are worked. We show how this would shrink if men worked hours that were closer to Australia’s legislated 38-hour week, and workplaces encouraged them to do so.

Closing the gap

If we stopped the time-shifting to partners that our culture of long working hours relies upon, we estimate that in a heterosexual couple, men’s hours would average closer to 41 a week, and women’s would increase to 36.

We could change the long and short hour compromise that so many households have to face. This change could make a huge difference to gender inequality, and women would no longer carry such a large economic cost from their partner’s work.

Maybe reining in excess hours should be the new focus for gender equality.