One big reason women make less than men is because they tend to demand more flexible schedules. And new economic research shows that if more workplaces adopted a more team-oriented, job-sharing approach—like physicians in a group practice—the cost of flexible work would dissipate and the premium for long hours would too.
“That’s how physicians have been able to not be 24/7, not be on call all the time, to have lives of their own,” says Claudia Goldin, a Harvard professor of economics. Her new paper, A Grand Gender Convergence: Its Last Chapter (pdf), is to be published soon in the American Economic Review, and explores the reasons behind pay differential between genders even as women have caught up with men in education, experience, and other measures.
The bottom line: The way work is structured and rewarded, especially in traditional organizations, must adapt to changes in society and technology. Many companies still richly reward people who are available and work long, continuous hours, Goldin says. They give premium pay to certain key players—mostly men who don’t take time off for children or aging relatives. So women or men who need flexible schedules obtain them ”at a high price, particularly in the corporate, finance and legal worlds,” Goldin writes in her paper. Technology and science fields are better off in pay equity, as are certain health care careers.
She does not quantify the exact cost of flexible work schedules, though she has studied the pay gap that develops over time for women in other research. “What happens within each occupation is far more important than the occupations in which women wind up,” she writes.
She asks: Why should someone who works 80 hours a week be worth more than two people who work 40 hours a week?
“It isn’t quote a women’s issue,” says Goldin in an interview with Quartz. The pay disparity shows up equally when male MBAs need reduced schedules or time off for personal or family needs.
Men’s and women’s occupations, education and roles at work have converged in the last decades, and equal pay could be the last cornerstone. It’s already near equal when women and men start their careers, then starts diverging after five years and is wider by 15 years of experience.
Government intervention will not help, but economic incentives such as lower costs could. “Some things simply occur organically,” Goldin noted.
“Pharmacists have become very good substitutes for each other. …Being good substitutes for each other means it doesn’t matter who does the last hour,” she says.
In workplaces where staff have no “perfect substitutes” people may be penalized if they work shorter hours or must depart for a few hours during the work day, she writes. Those who have a “perfect substitute”—someone who can pick up when you leave off, or take the last few hours so a parent can put their child to bed—will not earn a premium in earnings and their pay increases are linear, based mainly on hours worked and experience levels.
Goldin saw the “perfect substitute” up close recently when she had a minor surgical procedure and a team of doctors took care of her. “That’s how physicians have been able to not be 24/7, not be on call all the time and have lives of their own,” she said admiringly, noting that 36% of pediatricians work very low hours.
So go ahead and groom your “perfect substitute”—preferably before your next vacation or baby arrive.