Effects of Gender and Family on Pay Differentials in Western Industrial Societies: Convergence and Divergence (2006)

ABSTRACT This study takes a comparative approach to examine factors that influence gender-based pay differentials and career paths in western industrial societies, particularly comparing the United States and selected European countries. Results indicate that increased participation of women in the workforce while maintaining their traditional roles at home is a global phenomenon, but patterns of the work-family relationship and the impact of gender and family on pay differentials differ across borders. Factors that influence gender equity in wages and wage growth range from cultural norms to quality of labor, career patterns, and corporate practices. Types of regime pertaining to the role of state in work-family arrangements and wage settings also help explain trends and developments in pay gap adjustment and career patterns between men and women in western industrial societies. Based on recent national and regional statistics and previous research on the effects of gender and family on pay equity, several propositions have developed through a multivariate conceptual framework. Suggestions for future research and implications for the practical field are discussed. INTRODUCTION This study investigates effects of gender and family on pay differentials and career paths from a cross-cultural perspective, with special attention to western industrial societies. For most men and women today, work and family are central life domains and the work-family relationship has become an increasingly important object for research, and for policy making in the practical field. As well gender equity and work-family interfaces are increasingly recognized as significant organizational issues. This is largely because of increased participation of women, of dual career couples, and of single-parents in the workplace. In the United State, for example, only about 43% of women aged 16 and older participated in the workforce in 1970, but by 2004, the rate had raised to about 60% (USDOL & BLS, 2005). At the same time, working mothers with children under age of 18 rose from 47% in 1975 to 71% in 2004. Along with their rising rate of participation in the workplace, women have also made substantial inroads into better-paying occupations. The proportion of women employed as managers, administrators, or executives nearly have doubled in the past two decades. However, the median weekly earnings for female full-time wage and salary workers are 76% of the median for their male counterparts, although the earnings gap between women and men has narrowed for most all age groups (UDDOL & BLS, 2001). Among all married-couple families, about 58% are dual earners, but working wives' earnings remain largely a secondary income for the household, averaged about 3 5% of the total household income (USDOL & BLS, 2005). Meanwhile, economic and business globalization has made gender equity and work-family adjustment pivotal to organizational competitiveness across borders. There has been empirical evidence that family adaptability is an important predictor for expatriate performance among surveyed multinationals headquartered in Europe or the United States (Brewster, 1988; Hamil, 1989; Marx, 1996; Tung, 1981; Yang, 2005). Effective management of the workforce diversity and pay equity, including both visible (e.g., gender and marital status) and invisible variables (e.g., variation in family demand and cultural norms about gender roles), is significantly related to organizational outcomes such as productivity, job satisfaction, workplace morale, and employee well-being (Frone, 2003; Yang 2005). It has been argued that with increased women participation in the domestic workforce and as the international experience becomes increasingly important for career progression, there will be more female expatriate managers in multinationals (Dowling & Welch, 2005). Clearly, multinational firms and global managers need to be aware of gender, family and cultural influences on their operations, human resource management, and organizational justice across borders. …